SEBASTIEN CANDERLE
IN finance, as in all walks of life, people tend to see their environment as predictable. With experience, investment professionals acquire a better understanding of markets, become more confident of their abilities, and conclude that they can interpret the world more precisely.
The philosopher of science Karl Popper offered his take on the main issue with such determinism during a 1965 lecture titled Of Clouds and Clocks: An Approach to the Problem of Rationality and the Freedom of Man.
He divided the physical world into 2 distinct categories: clouds, which are “highly irregular, disorderly, and more or less unpredictable”, and clocks, which are their opposites. He observed...
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