Monday, July 19, 1999
Becoming a Complete Fool
I have always had foolish tendencies when investing, but I think it may be this week that I became a complete Fool. I was listening to a Wise network financial reporter describe how the market (he meant the Dow Jones Industrial Average) was down 30 points that day due to something somebody named Greenspan said (or maybe it was what he didn't say, or what he was going to say, or something).
Thirty points represents less than a 0.3% change. You don't have to be a statistician to look at the normal fluctuation in the DJIA to recognize that a 30 point change is not significant, is well within normal variability, and cannot be assigned a cause. I guess if they reported "an insignificant change, and we certainly don't know why," it would hurt ratings.
It is absolutely bizarre that virtually every nightly report reviews the market change and tells us why the market reacted in that way. I think they take The Wall Street Journal headline, insert the word "because" and add on The New York Times headline. I wonder why the Wise don't recognize these causes of short-term market variations ahead of time and become Wise millionaires, instead of after-the-fact reporters.
Finally, yesterday, I read a summary from the Wise explaining that growth stocks would continue to slump until the economy stopped growing rapidly (which might cause inflation, which might cause a central bank rate hike, which might cause minutely higher interest rates, which might hurt something or the other). I am too Foolish to follow this convoluted logic. Especially since I remember reports from the same source explaining that growth stocks would continue to slump because the economy was not growing fast enough. Yes, it seems, I am an utter and complete Fool.
|Recent Fribble Headlines|
|12/26/00||The Do Donate Fribble|
|12/22/00||The Don't Donate Fribble|
|12/20/00||Ode to Mom at Christmas|
|12/18/00||More to Life Than Net Worth|
|12/15/00||Seasons in Investing|
|Fribble Archives »|