Posts Tagged ‘stock market’
“Who owns the future? This is the question at the heart of every stock market.”*…
In November of last year, I opened a brokerage account. I had been reading simple, bullet-pointed introductions to financial literacy for a few months before that, manuals “for dummies” of the sort that I am conditioned to hold in contempt when their subject is, say, Latin, or the Protestant Reformation…
It was driven home to me repeatedly in my early efforts to build an investment strategy that, quite apart from the question of whether the quest for wealth is sinful in the sense understood by the painters of vanitas scenes, it is most certainly and irredeemably unethical. All of the relatively low-risk index funds that are the bedrock of a sound investment portfolio are spread across so many different kinds of companies that one could not possibly keep track of all the ways each of them violates the rights and sanctity of its employees, of its customers, of the environment. And even if you are investing in individual companies (while maintaining healthy risk-buffering diversification, etc.), you must accept that the only way for you as a shareholder to get ahead is for those companies to continue to grow, even when the limits of whatever good they might do for the world, assuming they were doing good for the world to begin with, have been surpassed. That is just how capitalism works: an unceasing imperative for growth beyond any natural necessity, leading to the desolation of the earth and the exhaustion of its resources. I am a part of that now, too. I always was, to some extent, with every purchase I made, every light switch I flipped. But to become an active investor is to make it official, to solemnify the contract, as if in blood…
Justin E. H. Smith (@jehsmith) wrestles with taking stock of one’s soul: “On the Market.”
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As we ponder the long and short of it all, we might recall that today is National Pig Day.
“There are three types of lies — lies, damn lies, and statistics”*…
“Hiding in Plain Sight”
A chart’s purpose is usually to help you properly interpret data. But sometimes, it does just the opposite. In the right (or wrong) hands, bar graphs and pie charts can become powerful agents of deception, tricking you into inferring trends that don’t exist, mistaking less for more, and missing alarming facts. The best measure of a chart’s honesty is the amount of time it takes to interpret it, says Massachusetts Institute of Technology perceptual scientist Ruth Rosenholtz: “A bad chart requires more cognitive processes and more reasoning about what you’ve seen.”…
Five examples (like the one above) of the kinds of tricks that charts can try to pull, explained: “Five Ways to Lie with Charts.”
* Benjamin Disraeli
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As we stack the deck, we might recall that it was on this date in 2010, at 2:32p EDT, that the U.S. stock markets suffered a “Flash Crash”– in a period of just 36 minutes, the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite collapsed and rebounded (the Dow, e.g., lost 9% of its value, then recovered most of it).
Nearly five years later, the SEC charged a 36-year-old small-time trader who worked from his parents’ modest stucco house in suburban west London with having caused the collapse (using spoofing and layering, along with a form of front-running– all now explicitly outlawed). But many experts are not convinced; to this day, there are numerous theories– but no consensus– as to the cause(s) of the crash.
The DJIA on May 6, 2010 (11:00 AM – 4:00 PM EDT)
“Induction for deduction, with a view to construction”*…
Mushroom cloud from the world’s first successful hydrogen bomb test, Nov. 1, 1952
At RAND in 1954, Armen A. Alchian conducted the world’s first event study to infer the fissile fuel material used in the manufacturing of the newly-developed hydrogen bomb. Successfully identifying lithium as the fissile fuel using only publicly available financial data, the paper was seen as a threat to national security and was immediately confiscated and destroyed…
How a bench researcher used publicly-available market data to unlock the secret of the H Bomb: “The Stock Market Speaks: How Dr. Alchian Learned to Build the Bomb” (pdf).
* Auguste Compte (attributed by John Arthur Thomson in a quote at heading of the chapter “Scientific Method,” in his Introduction to Science
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As we comb the columns, we might recall that it was on this date in 1883 that the S.S. Daphne sank moments after her launching at the shipyard of Alexander Stephen and Sons in Glasgow. The 500-ton steamer went down with 200 men on board– all of them working to finish her before the shipyard closed for the Glasgow Fair. Only 70 were saved.
“This world’s a bubble”*…
From “The Bay Area to Standard English Translator.”
[A similarly silly-but-serious bonus: “An Interactive Guide to Ambiguous Grammar.”]
* alternately attributed to St. Augustine and to Francis Bacon
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As we send birthday greetings to the father of the field of sociology and the discipline of Positivism, August Comte, we might recall that it was on this date in 1929 that bearish economist Roger Babson gave a speech in which he warned, “sooner or later, a crash is coming, and it may be terrific.” He had been delivering this message for two years, but for the first time, investors listened. The stock market took a severe dip (now known in economic history as “the Babson Break”). The next day, prices stabilized, but the equity collapse that we know as a trigger event for the Great Depression had begun.
Roger Babson
“Heigh ho, heigh ho, it’s off to work we go”*…
Researchers often look at the number of hours worked, but rarely do they ask the question of when. Fortunately, the government conducts an annual study called the American Time Use Survey that tracks how people spend their days…
The interactive graph pictured above (and available live here) shows the share of workers who say they’re working in a given hour, grouped by occupation. The tabs at the top allow one to focus on different job categories to see how their average workdays differ from one another. For example, servers and cooks have a schedule that’s essentially the opposite of all other occupations; their hours peak during lunch and hold steady well into the evening.
Explore more at “Who’s In The Office? The American Workday In One Graph.”
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As we breathe a sigh of relief that these studies don’t extend to what one does at work, we might recall it was on this date in 1929 that panicked sellers traded nearly 16 million shares on the New York Stock Exchange (four times the normal volume at the time), and the Dow Jones Industrial Average fell 12%. Remembered as “Black Tuesday,” this was the conclusive event in the Crash of 1929, and is often cited as the start of the Great Depression.
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