Why ask Why? - Trading-Lab

Leth · #1 04-08-2008, 02:45 AM

The Stock Market Surged Yesterday Because … Why?
By Stephen J. Dubner of Freakonomics

I may be wrong, but it strikes me that the articles that appear in nearly every newspaper every day that describe a particular day’s stock-market movements are pretty much worthless.
They try to pin a cause or two on the effect that’s just been observed, when in fact the effect may have little relationship with the narrow causes being credited. Consider, for instance, this A.P. headline and news brief that appeared on Yahoo! News at about 2:30 p.m. yesterday:
“Stocks Surge to Start Q2″
Wall Street began the second quarter with a big rally Tuesday as investors rushed back into stocks amid optimism that the worst of the credit crisis has passed and that the economy is faring better than expected.
How does the A.P. really know that investors “rushed back into stocks” because they were optimistic that “the worst of the credit crisis had passed” and that the economy is “faring better than expected”?
The A.P. folks sure didn’t learn this from reading their own business headlines. Here are five A.P. headlines that appeared directly beneath the stock-surge news brief.
“Celent: 200,000 US Banking Jobs at Risk”
“Manufacturing, Construction Weaken”
“Ford, Toyota U.S. Sales Down in March”
“Congress Has Big Questions for Big Oil”
“U.B.S. Will Write Down $19 Billion”
Here are a couple of stock-market headlines I’d love to read one day:
“Stocks Surge, Reasons Unknown; May Be Nothing More Than the Random Fluctuation of a Complex System”
or:
“Stocks Dive: Three First-Movers Sold Hard and Then Everyone Else Inexplicably Followed”
But I could probably live to 150 and never see that happen.

Soverus Khan · #2 04-08-2008, 11:40 AM

Here's what I would love to read or hear:

"DJIA up/down.....x%
NAZ up/down....x%
S&P up/down.....x%

If you understand market terminology, you know where to find your info (not us talking heads)...good night".

Naw, wouldn't work. Nothing in there to sway the retail masses, ha ha!

Here's some good sound bites:

DJIA plummets 16 points as economic woes drive investors from the market....ha!

NAZ surges to explosive 6 point gain as tech appears to be the easy money....ha!

Fade the headlines.

Leth · #3 04-08-2008, 04:23 PM

Quote:

Originally Posted by Soverus Khan

Here's what I would love to read or hear:

"DJIA up/down.....x%
NAZ up/down....x%
S&P up/down.....x%

If you understand market terminology, you know where to find your info (not us talking heads)...good night".

Naw, wouldn't work. Nothing in there to sway the retail masses, ha ha!

Here's some good sound bites:

DJIA plummets 16 points as economic woes drive investors from the market....ha!

NAZ surges to explosive 6 point gain as tech appears to be the easy money....ha!

Fade the headlines.

Damn right khaun...without the talking heads...we cant make much money!

aiki14 · #4 04-08-2008, 10:56 PM

I am wondering what percentage of any "news based" moves in the market are the responsibility of the retail investor versus the institutional investor. And secondarily how much do the market makers influence the direction of the reactions to news.

Soverus Khan · #5 04-09-2008, 12:37 AM

Bad news all day long today on AAPL getting a lower analyst rating. At times, the soundbite was "AAPL shares tumbling...". I trade AAPL everyday. Today it never "tumbled" in relevant terms and it traded throughout the day well within it's adr. I should count the times I chuckle throughout the day at the sound bites.

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#1 04-08-2008, 02:45 AM
Leth Super Moderator Join Date: Oct 2007 Posts: 621	Why ask Why? The Stock Market Surged Yesterday Because … Why? By Stephen J. Dubner of Freakonomics I may be wrong, but it strikes me that the articles that appear in nearly every newspaper every day that describe a particular day’s stock-market movements are pretty much worthless. They try to pin a cause or two on the effect that’s just been observed, when in fact the effect may have little relationship with the narrow causes being credited. Consider, for instance, this A.P. headline and news brief that appeared on Yahoo! News at about 2:30 p.m. yesterday: “Stocks Surge to Start Q2″ Wall Street began the second quarter with a big rally Tuesday as investors rushed back into stocks amid optimism that the worst of the credit crisis has passed and that the economy is faring better than expected. How does the A.P. really know that investors “rushed back into stocks” because they were optimistic that “the worst of the credit crisis had passed” and that the economy is “faring better than expected”? The A.P. folks sure didn’t learn this from reading their own business headlines. Here are five A.P. headlines that appeared directly beneath the stock-surge news brief. “Celent: 200,000 US Banking Jobs at Risk” “Manufacturing, Construction Weaken” “Ford, Toyota U.S. Sales Down in March” “Congress Has Big Questions for Big Oil” “U.B.S. Will Write Down $19 Billion” Here are a couple of stock-market headlines I’d love to read one day: “Stocks Surge, Reasons Unknown; May Be Nothing More Than the Random Fluctuation of a Complex System” or: “Stocks Dive: Three First-Movers Sold Hard and Then Everyone Else Inexplicably Followed” But I could probably live to 150 and never see that happen. __________________ Nothing is more difficult than the art of maneuvering for advantageous positions. - Sun-Tzu Trade with the trend, Ride winners, Cut losers, Keep bets small, Use Stops - Old School

#2 04-08-2008, 11:40 AM
Soverus Khan Senior Member Join Date: Dec 2007 Posts: 306	Here's what I would love to read or hear: "DJIA up/down.....x% NAZ up/down....x% S&P up/down.....x% If you understand market terminology, you know where to find your info (not us talking heads)...good night". Naw, wouldn't work. Nothing in there to sway the retail masses, ha ha! Here's some good sound bites: DJIA plummets 16 points as economic woes drive investors from the market....ha! NAZ surges to explosive 6 point gain as tech appears to be the easy money....ha! Fade the headlines.

#4 04-08-2008, 10:56 PM
aiki14 Member Join Date: Jan 2008 Location: Philly Burbs, PA Posts: 82	I am wondering what percentage of any "news based" moves in the market are the responsibility of the retail investor versus the institutional investor. And secondarily how much do the market makers influence the direction of the reactions to news. __________________ I read somewhere that 77 per cent of all the mentally ill live in poverty. Actually, I'm more intrigued by the 23 per cent who are apparently doing quite well for themselves. --Jerry Garcia The idea is to try to give all the information to help others to judge the value of your contribution; not just the information that leads to judgment in one particular direction or another. --Richard P. Feynman

#5 04-09-2008, 12:37 AM
Soverus Khan Senior Member Join Date: Dec 2007 Posts: 306	Bad news all day long today on AAPL getting a lower analyst rating. At times, the soundbite was "AAPL shares tumbling...". I trade AAPL everyday. Today it never "tumbled" in relevant terms and it traded throughout the day well within it's adr. I should count the times I chuckle throughout the day at the sound bites.