Are economists alot like stock brokers?

An economist deals with economic statistics, it is their job to make sure that the company that they work for, make the right or logical decisions based on their economic statistical study.

So if economists are heavily associated with analyzing business statistics, doesn't stock brokers do the same thing?

Can someone please explain the differences because I would like to know if its an easy transition for an economist to be a stock broker and vice-versa.

Thanks a lot!

Public Comments

1. A good question, and the answer is not at all. But economists perform similar analysis to securities analysts.

A stock-broker is really a salesman. He or she buys and sells stock, and completes orders to buy and sell stock for their customers. Brokers may or may not do a substantial amount of statistical analysis.

A securities analyst generally follows one of two schools of thought: fundamental and technical.

A technical analyst uses lots of statistics to understand movement of stock prices. He or she treats the historical prices and volumes as a stochastic trend and attempts to predict its future direction. When you see terms such as "daily moving average", "channels" or "candlestick chart", you're dealing with technical analysis. Technical analysts rate stocks as a "buy" or "sell" based on expected short-term movements.

A fundamental analyst uses very little stats and relies much more heavily on accounting and finance. He or she attempts to determine an intrinsic value for that security based on underlying factors such as cash flows, revenue growth, dividends and financial ratios. Occasionally a fundamental analyst will run a regression to determine the average rate of growth in some factor, but otherwise its very formulaic. Fundamental analysts base their "buy" and "sell" recommendations on the current price and the intrinsic price.

Economists learn skills that belong in both camps; we use statistics to understand trends in data and attempt to see significant movements or differences. We also use financial and accounting knowledge to understand what motivates companies, investors and other stakeholders in the economy.

A background in economics won't help as much in a career as a stock-broker as will a background in business.