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A perfect example of this, is stock market reporting. On a daily basis, stocks move, sometimes a lot - but apart from the people who make them move (and even th

A perfect example of this, is stock market reporting. On a daily basis, stocks move, sometimes a lot - but apart from the people who make them move (and even then, it can be impossible for them to know it's them !), nobody knows why. But a lot of people, without knowledge of finance or economics, want to know *why* stocks moved. And so, we have an entire industry reporting on a daily basis, without any direct knowledge about the thing they are reporting about ! As the author said, there are few penalties for bullshit, and many rewards !

rsanek 2y ago
I don't know if I'd go this far. If a company reports earnings far below what they previously gave guidance on, the stock pretty reliably falls.
- elijaht 2y ago
  Disagree- plenty of times in my career the company I work for beats/misses guidance and the stock moves in the “wrong” direction. To the point where it was independently a joke in multiple companies
- TheAlchemist 2y ago
  Yes, but not always - in the case it goes in the opposite direction, they will write 'investors priced it in already' :D There are of course tangible things that can help explain movements, but truth is - very very rarely those writing the articles know what's going on on the market. Another funny thing in the market, mostly recently, is that earnings are announced after hours - and most of the movement happen in those after hours - which doesn't really make sense, since the liquidity is very very limited. So how come that just following the earnings, the price of say Tesla will go +10% in the after hours, and then stay pretty much at that level the next day, when real investors and big funds start trading ? Who knows...
kjkjadksj 2y ago
The day of stock reports are such crap its actually entertaining to read. Especially when the market whiplashes a couple minutes after the midday report and they need to come up with a narrative. Most of the moves could honestly be summed up with “it was noon so a bunch of hft cron jobs turned on right then and bought or sold” or “nice numbers ending in 0 or 5 have their own gravity pull”
Anotheroneagain 2y ago
Nobody knows why, because it's meaningless noise. It's just what the stock was traded for in that particular moment, somebody offered to trade for that much and somebody accepted that offer which alone is a meaningless number. You need some longer term average according to volume, not points in time to gain any meaningful information.
tommiegannert 2y ago
My favorite style to dislike is "Fed sees inflation as astronauts are trapped on ISS." They really want to make it sound like a causal relationship, using "as" as "and [with unspoken implications; nudge, wink]" instead of simply posting two articles.
lextuto 2y ago
Here's a potentially relevant quote from "The Man Who Solved the Market" by Gregory Zuckerman[0]. "One day, a data-entry error caused the fund to purchase five times as many wheat-futures contracts as it intended, pushing prices higher. Picking up the next day’s Wall Street Journal, sheepish staffers read that analysts were attributing the price surge to fears of a poor wheat harvest, rather than Renaissance’s miscue. [...] “Any time you hear financial experts talking about how the market went up because of such and such—remember it’s all nonsense,” [Peter] Brown [CEO of Renaissance Technologies] later would say." [0] https://www.gregoryzuckerman.com/the-books/the-man-who-solved-the-market/ https://www.gregoryzuckerman.com/the-books/the-man-who-solve...
throw0101a 2y ago
> But a lot of people, without knowledge of finance or economics, want to know why stocks moved. And so, we have an entire industry reporting on a daily basis, without any direct knowledge about the thing they are reporting about ! They move due to information about the stock and the perception (which is a type of information) about the stock. But since you don't know when new information about a company/stock will become public, nor when the perceptional information about it will shift, the changes are effectively random: * https://en.wikipedia.org/wiki/A_Random_Walk_Down_Wall_Street https://en.wikipedia.org/wiki/A_Random_Walk_Down_Wall_Street And if there is new information about it, those that get it first (unlikely to be you) will be able to capitalize on in better; and as it spreads that information will take more and more of an effect on the stock price. To paraphrase William Gibson: the information is already here, it's just not evenly distributed.

rsanek 2y ago

I don't know if I'd go this far. If a company reports earnings far below what they previously gave guidance on, the stock pretty reliably falls.

elijaht 2y ago
Disagree- plenty of times in my career the company I work for beats/misses guidance and the stock moves in the “wrong” direction. To the point where it was independently a joke in multiple companies
TheAlchemist 2y ago
Yes, but not always - in the case it goes in the opposite direction, they will write 'investors priced it in already' :D There are of course tangible things that can help explain movements, but truth is - very very rarely those writing the articles know what's going on on the market. Another funny thing in the market, mostly recently, is that earnings are announced after hours - and most of the movement happen in those after hours - which doesn't really make sense, since the liquidity is very very limited. So how come that just following the earnings, the price of say Tesla will go +10% in the after hours, and then stay pretty much at that level the next day, when real investors and big funds start trading ? Who knows...

kjkjadksj 2y ago

The day of stock reports are such crap its actually entertaining to read. Especially when the market whiplashes a couple minutes after the midday report and they need to come up with a narrative. Most of the moves could honestly be summed up with “it was noon so a bunch of hft cron jobs turned on right then and bought or sold” or “nice numbers ending in 0 or 5 have their own gravity pull”

Anotheroneagain 2y ago

Nobody knows why, because it's meaningless noise. It's just what the stock was traded for in that particular moment, somebody offered to trade for that much and somebody accepted that offer which alone is a meaningless number. You need some longer term average according to volume, not points in time to gain any meaningful information.

tommiegannert 2y ago

My favorite style to dislike is "Fed sees inflation as astronauts are trapped on ISS." They really want to make it sound like a causal relationship, using "as" as "and [with unspoken implications; nudge, wink]" instead of simply posting two articles.

lextuto 2y ago

Here's a potentially relevant quote from "The Man Who Solved the Market" by Gregory Zuckerman[0]. "One day, a data-entry error caused the fund to purchase five times as many wheat-futures contracts as it intended, pushing prices higher. Picking up the next day’s Wall Street Journal, sheepish staffers read that analysts were attributing the price surge to fears of a poor wheat harvest, rather than Renaissance’s miscue. [...] “Any time you hear financial experts talking about how the market went up because of such and such—remember it’s all nonsense,” [Peter] Brown [CEO of Renaissance Technologies] later would say." [0] https://www.gregoryzuckerman.com/the-books/the-man-who-solved-the-market/ https://www.gregoryzuckerman.com/the-books/the-man-who-solve...

throw0101a 2y ago

> But a lot of people, without knowledge of finance or economics, want to know why stocks moved. And so, we have an entire industry reporting on a daily basis, without any direct knowledge about the thing they are reporting about ! They move due to information about the stock and the perception (which is a type of information) about the stock. But since you don't know when new information about a company/stock will become public, nor when the perceptional information about it will shift, the changes are effectively random: * https://en.wikipedia.org/wiki/A_Random_Walk_Down_Wall_Street https://en.wikipedia.org/wiki/A_Random_Walk_Down_Wall_Street And if there is new information about it, those that get it first (unlikely to be you) will be able to capitalize on in better; and as it spreads that information will take more and more of an effect on the stock price. To paraphrase William Gibson: the information is already here, it's just not evenly distributed.