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  • Writer's pictureSabrina Abib

The quest of "reason" in finance

"The need of reason is not inspired by the quest for truth but by the quest for meaning. And truth and meaning are not the same. The basic fallacy, taking precedence over all specific metaphysical fallacies, is to interpret meaning on the model of truth".

As this quote of Hannah Arendt is highlighting it, reason, truth and meaning, are three concepts indeed intertwined but from differents roots...

We cannot understand financial markets as a conceptual whole if we simply look at the ways and means of stock market trends; nor can we understand or explain them from an analysis of the interactions between evolutionary rules and the daily decisions-making of private actors.

Indeed, while these two elements are, nevertheless meaningful indicators, they are incapable of providing us with a reliable explanation of the well-defined "structure" that the financial markets are.

Financial markets constitute a complex and dynamic cosmology that cannot be comprehended at a wide and confused scale. As a private actor, as a regulator, as a public authority, we have no choice but to act in an uncertain environment, knowing that our knowledge can not progress beyond this uncertainty principle. To understand this, it's to be able to develop informed strategies while embrassing randomness.

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