charts were speaking

Ett utdrag ur Michael Lewis bok Liar's poker. En mycket underhållande bok om 80 talets wall street.

When it came to speculation, European investors didn?t require a great deal of encouragement or instruction. They?d been doing crazy things with money for centuries. The French and the English, in particular, shared a weakness for get-rich-quick schemes. And like a crapshooter who has a pretty lady to blow on his dice, the speculators in booth countries had an amazing array of irrational systems to help them win money. They had to guess which direction the American bond market would take: up or down.

The systems usually involved staring for hours at charts showing the history of bond prices. As in Rorschach inkblots, an unlikely formation, such as a human head and shoulders, made itself privately known to the viewer. The chartist ? for that is what such person would called himself ? would then use his ruler and pencil to draw the future of bond prices based on the assumption that the historical pattern could be projected forward. Miraculously, in a bull market, the resulting forecast was usually that the market was going up.

Actually there was one good reason for using the charts: everyone else did. If you believed that large sums of money were about to be invested on the basis of a chart, then, as dumb as it made you feel, it made sense to look at that chart; perhaps it would enable you to place your bet first and get in front of the coming wave. Many of our French and English speculators, however, honestly believed the charts contained the secrets of the market. They are aboriginal chartists. They would have used the charts even if no one else did. They communed with their charts as if they were Ouija boards. The charts were speaking to them.