In our text it states: ‘Most of us hate uncertainty’, wrote the former derivativ
ID: 347012 • Letter: I
Question
In our text it states: ‘Most of us hate uncertainty’, wrote the former derivatives trader Pablo Triana in 2009. ‘The unknown, the dubious, the inscrutable. Most of us despise the immeasurable. We dislike living in a world where unquantifiable vagueness can roam freely … We can’t accept that wild randomness and utter chaos may be all there is to it. We seek the comfort of order, and con ourselves into believing that someone, somewhere must have the answers, down to the third decimal.
Why do you feel individual hate uncertainty and when is uncertainty actually good?
Explanation / Answer
Individuals like to plan for the future and bring accuracy in the forecasting. though, it cannot happen when uncertainties take place and it scuppers the plans made by the individuals. So, these people don’t like uncertainties. Precisely, it is true when there are plans related to trading and investment in the financial market. If relied upon the technical analysis, there is a higher degree of uncertainties due to the random walk movement of the stock (duly quoted by Pablo Triana w.r.t. the derivatives) in the capital market and it makes people to be unable to predict the future. It is the reason that investors go with the fundamental analysis that uses the company specific business data to predict the future and reduce the uncertainty. Besides, inability to plan and forecast due to uncertainties, causes lack of capacity building and resource organization and I acts as a hindrance. Hence, individuals don’t like uncertainties.
Uncertainties are good when it creates the scope of opportunity. If uncertainty disturbs the order, then it also brings new opportunities that can be catered and the potential is realized. For example, in capital market, uncertainties can lead to losses in the stock market, but it also creates the opportunity to invest at lower prices and gain the benefits when prices soar. It is also there in the job market. Not involved a job, may be a result of uncertainty. But, it also shows a new direction in the form of inventions and enterprises to realize the potential. It is only possible due to the presence of uncertainties.
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