Historical context and markets
Look at a painting, and you can have a view of whether you like it or not. Something might catch your eye, perhaps it's the style of painting. Maybe it's the colours. Could it be the subject topic? However, without any context about the artist and the period in which it was painted, it can be more challenging to gauge whether there is a deeper meaning within the painting. Without any context, any view about a painting, is going to focus on the superficial elements which can immediately be seen (and that's usually where my "analysis" kind of stops of art, because I haven't got much background knowledge in this area!).
Context is obviously not purely important in the understanding of art, but also in understanding politics. I've recently been reading a biography by Robert Caro of former US President Lyndon B Johnson, which is split into 4 volumes, which cover LBJ's life from his childhood to the early 1960s (the 5th volume covering the last part of his life is currently being written). It's an extremely well written series of books and I'm getting close to the end of the 4th volume. A key part of Caro's biography, is discussing how the context of LBJ's upbringing impacted how his politics developed. More broadly, trying to understand a country's politics is incredibly difficult, without understanding its history as context. It's one of my main motivations for reading LBJs biography and quite a few other books on US history to better understand the country today. I have to admit I still have quite a few gaps in my knowledge of US history, and I'm hoping to fill them over the coming years, but reading more. As an aside, any recommendations about your favourite books on US history would be very welcome!
When we look at markets, it can be tempting simply to look at time series in isolation, without the context. I recently saw read an article, by Mr Risk (also known as Fred Goodwin) from State Street, discussing the price action in equity market at present, comparing it to another period in the early 60s. The context was that of price action in markets towards the beginning of a President's term (in this case JFK compared to Trump). It got me thinking more broadly...
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Creator of the Art as a Derivative concept. Uniquely, I make art about the people and structures shaping financial markets.
6 年Saeed, if you can explain to me the Gaussian Copula in one hour, I'll give you a pitch on the early moderns in art history - 1905-35!