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Monday, December 12, 2011

Financial Reporting

Back when I worked with a bunch of traders, the lads used to crack up at the "explanations" the media would give for the movements of the stock averages.* I thought of this the other day, when I heard on the radio, "The Dow is down twelve points, on worries that a deal to solve the Euro crisis may fall through."

Twelve points! That is a .1% change in an index of thirty stocks. It is just a little, random wiggle. Half-an-hour later, the Dow was up one point. The business reported did not offer an opinion as to whether those worries had disappeared.

* Sometimes there are sensible explanations, like when the Dow sinks 500 points because Greece just went bankrupt, or something like that. What was funny was that the media attempted to explain every little wiggle as if there was an equally obvious cause.

1 comment:

  1. Watch how they hedge in the explanations: "Dow down 12 points on worries ..."

    "Whoa whoa whoa, I didn't say those worries caused the 12 point decline. I'm just saying, you know, it was kind of contemporary with it!"

    ReplyDelete