Von Hayek publicly stated that he made an effort to make economics more scientific in the sense assumed by the term. Like any industry, the financial industry also attempts to use a more favorable and accepted language to attract customers and to clothe the fact that the financial sector is just a part of the gambling and gaming industry. Replace betting vocabulary for financial terms and it becomes clear. If you look at it closely, most activities in the finance sector are actually bets as it is in the gambling sector. And for many centuries, the finance sector has been dissociating finance from gambling.
A touch of bluff and a dash of confidence
The finance sector and gambling are surprisingly the same in many ways. Both share the same skill sets too. Traders are defined by their skills, being cold towards risk, and having that quick decision even under mounts of pressure. Not to mention incredible discipline and a great memory. These are the same skill sets that define a successful poker player. Brandon Adams is a pro poker player and a professor at Harvard lecturing behavioral finance. He asserted that among the best traders are also professional poker players online.
Among the key points of gambling is bluffing and bullying. These are the topics of the latest study by Robert Shiller. He wrote in his book, Phishing for Phools, that you “cannot conquer the industry” by fighting that so long as there’s gain, sellers will methodically take advantage of our emotional flaws and our lack of knowledge by using tricks and lies.
At the core of any manipulation and deception is the role of confidence and the reliance on dangerous partners. Schiller recommends five crucial psychological elements in another book, Spirit of the Animals, the most crucial is confidence (or lack of confidence) in economics and personal economic status. The challenge is that while trust is important to heighten the billions of dollars required to advance the current industry, it is a valuable tool to deceive investors.
Financial advisors or in the gambling term “tipsters”- know that trust is the key to earning the trust of customers. Notice how many gambling websites such as http://22.214.171.124/ work on gaining the trust of their online visitors. Financial Advisors, Fund Managers, and Wealth Managers do the same thing. They understand and rely on our primary drive to trust one another and that includes trusting them.