Weekend Wisdom: The Mosh Pit vs. The Trader Pit

"The emotions aren't always immediately subject to reason, but they are always immediately subject to action." ~ William James

My observance of human behavior in my lifetime did not begin with behavioral finance -- it dates back much farther than the "investor herd."  I recall, in my long-haired, heavy metal days, occasionally attending some of the more rowdy, "hard core" concerts that inspired a swirl of craziness in front of the stage.  The "mosh pit," as it was (and still is) called, was a mass of bodies moving in a circular motion that had each participant looking for another to crash into.  I never participated but I quite enjoyed standing as close to the edge as possible -- just to observe and be entertained.

That seemingly reckless behavior has never really been removed from my observations -- it just changed venues...

Now I am led to think if any of those "mosh pit" participants grew up to become traders in "the pit" of a stock exchange.

Are there really any differences?  For right or wrong reasons, both "pits" represent the extreme behavior of their respective "industries."  My quick analysis finds a few fundamental differences and that the mosh pit may be healthier than the trader pit:

• The mosh pit appears foolish but, from what I recall in my observations, it was a quite effective release of pent-up energy and youthful "angst."
• The trader pit has come to represent just the opposite:  From the "open outcry" on the trading floor to the representation of options traders' risky appetites.  Images of traders' frustrations have come to symbolize the volatile emotions of the investor herd at large and are used by mass media for the purpose of dramatizing those emotions.
• If a mosh pit participant wants to do a "stage dive," then the other participants will gladly catch the stage diver and prevent them from smashing face-first onto the floor.  After all, they may want to do a stage dive as well!
• Trader pit participants are too busy with their own orders to notice or sympathize with a competing trader's downward spiral onto the floor...

In my younger days, I recall engaging in riskier behavior than I would today and I even enjoyed a few exhilarating stage dives.  One thing that has not changed, however, is that I prefer to observe the more extreme behavior than participate in it directly...

What are your thoughts?  Can risky behavior be rewarding?  Does it always need to reflect negatively on its participants? What about simple "people watching" activities?  Do you observe people in their day-to-day lives as a form of entertainment or relaxation?  Where are your favorite "people watching" locations?

Have a great weekend and, if you attempt a stage dive, be sure you have at least one person on the floor ready to catch you...

Comments

[Jeff]

Good traders in the pit see and hear everything, It's the things like volume, positions of other traders, expressions on peoples faces, order flow, and a host of other indicators a local has to watch.

Great post.

Jeff

[The Financial Philosopher]

Jeff:

Thanks for the insight on the trader pit. I imagine self-awareness and mindful attention to the present moment works well in almost any environment!

Thanks again...

[David]

Kent,

Funny that you should mention the trading pit and relaxing by people-watching.

When I used to commute to school in the city, I'd often take off if I was bored and head over to the CBOT on the way back to the train station. I loved to go up to the observation floor and just stare out on the trading floor below.

Never traded in the pits myself, but you might be interested to read the book, "The New Gatsbys", which is an excellent chronicle of life on the Chicago trading floors from the early days, up to the 1980s.

http://www.amazon.com/New-Gatsbys-Fortunes-Misfortunes-Commodity/dp/0688066712/

[The Financial Philosopher]

David:

Thanks for the recommendation of the book, "The New Gatsbys." I'm always looking for my next read and this book appears to be interesting...

Thanks again...

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