quote:
"Most of the time when markets move, no one has any idea why."

I will think of that quote (although I've believed the idea for years) the next time a talking head on CNBC tries to explain why the market went up (down) which happens everyday.

Kai Risdoll says this almost every day. "Stocks were up today on news that [whatever.]" But it's almost a rorschact test, because you can spin almost anything as either good news or bad news.

Say oil prices go up - you can say "stocks rose today as energy companies get a boost from rising prices" or "stocks fell today, led by transportation companies taking a hit over fears of increased fuel costs." Either of them sounds plausible by itself; neither is necessarily true.

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Posted by LSURussian

Member since Feb 2005

126993 posts

Posted on 2/7/11 at 1:39 pm to Cold Cous Cous

quote:
Say oil prices go up - you can say "stocks rose today as energy companies get a boost from rising prices" or "stocks fell today, led by transportation companies taking a hit over fears of increased fuel costs." Either of them sounds plausible by itself; neither is necessarily true.

A few years ago when I was still an employee rather than an employer, I had to take a quick, overnight, out of town road trip for my bank.

Driving there the business news break on the radio said "stocks are up because of encouraging signs that inflation is dead."

The next day I was driving back and the same guy on the same radio station said "stocks are up today because of fears of inflation and people are going into stocks as an inflation hedge."

I just looked at my co-worker traveling companion and said to her, "Can you believe that crap?" She laughed.

I've been super cynical ever since that media talking heads know any more than I do.

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