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We here a lot these days about the 'Psychology of the Investor' and certainly it is useful to know and understand. The other of the behavioural sciences, which can be just as informative, is Anthropology and its cousin Sociology. Anthropods are people. Thus Anthropology is the study of people within a defined context, their interactions, social structures, belief systems and the like. Usually Anthropology refers to this in the context of simple societies (eg. the Roro people of PNG). When done on more complex societies such as Australia, Anthropology morphs into Sociology. The language is and techniques are similar, their work slightly different!
When a Cultural Anthropologist goes to study a village for example, they can do so in one of two ways. Either way they are conducting an Ethnographic study. For example Robert.B.Ekvall in 1968 published an Ethnographic study he had done entitled "Fields On The Hoof: Nexus Of Tibetan Nomadic Pastoralism". The study was on a group of people called the aBrog Pa, who live on the side of a Tibetan mountain. A cursory glance of his contents page reveals the focus of the study: Livestock as a resource, Cultural Identity, Ownership and Social Structure, Protection, Care, Trade as Reaping, Raiding, Hunting, Harvesting, Food, Shelter, Clothing, Language, Social Interaction, Hospitality, Social Control, Religion, Personality Traits and Determinants, Childhood Experiential Determinants, Situational Determinants, Ethos-Cultural Determinants, Knowledge Basis of Chinese Policy, Need Basis of Chinese Policy, Policy and its Implementation.
If an Anthropologist researches by living as one of them for an extended period of time, this is known as "Emic Research". If they observe without trying to mix with them, in a detached manner, they are conducting top down or birds eye research called "Etic Research".
The same can be applied to markets. Markets are merely sophisticated forms of trading or bartering. They determine ownership of companies and can through the wealth they create for the companies and the investor, become a form of social control. If you are researching the company by taking their charts, imagining yourself as a part owner (shareholder) and how this would impact you by looking at the direction of the charts and then after discerning yourself in the mix of the company, compare it to other companies or indices, etc, you are doing 'bottom up research' or "Emic Research". If you do the reverse, take the indices, locate some undervalued stock, explore each one without getting too involved or 'attached' to one in particular, you are conducting 'Etic Research'. Understanding how your actions plays itself out in the market by seeing the market as a microcosm of society, is perhaps one part of Emic or Etic Research that most traders, especially the Corporates, probably forget.
As a trader, I find the major I did in my undergraduate studies in Anthropology and Sociology very useful. I offer this as a different perspective from another behavioural science. I'd be happy to explore this further, if there is enough interest.
When a Cultural Anthropologist goes to study a village for example, they can do so in one of two ways. Either way they are conducting an Ethnographic study. For example Robert.B.Ekvall in 1968 published an Ethnographic study he had done entitled "Fields On The Hoof: Nexus Of Tibetan Nomadic Pastoralism". The study was on a group of people called the aBrog Pa, who live on the side of a Tibetan mountain. A cursory glance of his contents page reveals the focus of the study: Livestock as a resource, Cultural Identity, Ownership and Social Structure, Protection, Care, Trade as Reaping, Raiding, Hunting, Harvesting, Food, Shelter, Clothing, Language, Social Interaction, Hospitality, Social Control, Religion, Personality Traits and Determinants, Childhood Experiential Determinants, Situational Determinants, Ethos-Cultural Determinants, Knowledge Basis of Chinese Policy, Need Basis of Chinese Policy, Policy and its Implementation.
If an Anthropologist researches by living as one of them for an extended period of time, this is known as "Emic Research". If they observe without trying to mix with them, in a detached manner, they are conducting top down or birds eye research called "Etic Research".
The same can be applied to markets. Markets are merely sophisticated forms of trading or bartering. They determine ownership of companies and can through the wealth they create for the companies and the investor, become a form of social control. If you are researching the company by taking their charts, imagining yourself as a part owner (shareholder) and how this would impact you by looking at the direction of the charts and then after discerning yourself in the mix of the company, compare it to other companies or indices, etc, you are doing 'bottom up research' or "Emic Research". If you do the reverse, take the indices, locate some undervalued stock, explore each one without getting too involved or 'attached' to one in particular, you are conducting 'Etic Research'. Understanding how your actions plays itself out in the market by seeing the market as a microcosm of society, is perhaps one part of Emic or Etic Research that most traders, especially the Corporates, probably forget.
As a trader, I find the major I did in my undergraduate studies in Anthropology and Sociology very useful. I offer this as a different perspective from another behavioural science. I'd be happy to explore this further, if there is enough interest.
