Trading Puzzles and Market Mysteries

Gregory Treverton offers an elegant passage on the difference between a puzzle and a mystery:

There’s a reason millions of people try to solve crossword puzzles each day. Amid the well-ordered combat between a puzzler’s mind and the blank boxes waiting to be filled, there is satisfaction along with frustration. Even when you can’t find the right answer, you know it exists. Puzzles can be solved; they have answers.

But a mystery offers no such comfort. It poses a question that has no definitive answer because the answer is contingent; it depends on a future interaction of many factors, known and unknown. A mystery cannot be answered; it can only be framed, by identifying the critical factors and applying some sense of how they have interacted in the past and might interact in the future. A mystery is an attempt to define ambiguities.

Puzzles may be more satisfying, but the world increasingly offers us mysteries. Treating them as puzzles is like trying to solve the unsolvable—an impossible challenge. But approaching them as mysteries may make us more comfortable with the uncertainties of our age.

Remember that while trading is a puzzle, the market itself is a mystery which will never be solved.

Source: Risks and Riddles (Smithsonian)

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