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If the markets react that means it is probably significant news, since the people who have millions at stake think this is enough to increase the future outlook

If the markets react that means it is probably significant news, since the people who have millions at stake think this is enough to increase the future outlook of the top companies. You should take them seriously because the markets reflect the thoughts of hundreds of thousands of people who's salary depends on trying to find out what the future looks like. Not sure what would be a better indicator of whether news is significant or not. Now of course what is good for top companies may not be good for individuals, so you can't just say that a stock price increase means people's lives are going to be better. But I think you can say that a stock market increase means the news you are seeing is more likely to be important.

jjk166 6y ago
But there are also people with millions at stake who are metagaming that other people will think this is important enough to increase the future outlook of top companies and thus changing their strategies to profit off them. The market is a weighted function of an insane number of variables, and we know none of the weights. Any attempt at reading the market to understand those variables is going to be about as useful as trying to observe butterflies by looking at hurricanes.
- 1123581321 6y ago
  The meta-strategies help market prices be accurate, faster, by beginning to move prices towards the “right” number in advance of information that would do the same thing. In the long run they don’t misinform. This obviously excludes strategies based on fraud, misinforming the public, etc.
  - jjk166 6y ago
    Accurate or right here means economically efficient, not correct according to the prediction of some simplified model. Such strategies very much obfuscate any attempt to find and measure causal links between particular events and stock price movements. I could say the markets are up due to the vaccine news, or because the US election was called and people are seeking stability, or because the US election was called and the market prefers biden, or because investors are pricing in a Trump 2024 run, or because people just expected it to go up after any of those things, or because a collection of automated trading bots saw some arcane pattern in the data which has no real-world relevancy but they nevertheless have been trained to buy. None of those predictions are falsifiable.
    - 1123581321 6y ago
      Correct; the prices are based on the sum of all information, which is a list we do not have. And “the market” is of course a basket of individual prices, which are not measured the same by everyone.

jjk166 6y ago

But there are also people with millions at stake who are metagaming that other people will think this is important enough to increase the future outlook of top companies and thus changing their strategies to profit off them. The market is a weighted function of an insane number of variables, and we know none of the weights. Any attempt at reading the market to understand those variables is going to be about as useful as trying to observe butterflies by looking at hurricanes.

1123581321 6y ago
The meta-strategies help market prices be accurate, faster, by beginning to move prices towards the “right” number in advance of information that would do the same thing. In the long run they don’t misinform. This obviously excludes strategies based on fraud, misinforming the public, etc.
- jjk166 6y ago
  Accurate or right here means economically efficient, not correct according to the prediction of some simplified model. Such strategies very much obfuscate any attempt to find and measure causal links between particular events and stock price movements. I could say the markets are up due to the vaccine news, or because the US election was called and people are seeking stability, or because the US election was called and the market prefers biden, or because investors are pricing in a Trump 2024 run, or because people just expected it to go up after any of those things, or because a collection of automated trading bots saw some arcane pattern in the data which has no real-world relevancy but they nevertheless have been trained to buy. None of those predictions are falsifiable.
  - 1123581321 6y ago
    Correct; the prices are based on the sum of all information, which is a list we do not have. And “the market” is of course a basket of individual prices, which are not measured the same by everyone.