29 Replies to “Wall Street Reminder: Nobody Knows Anything”

  1. I don’t profess to know much. I do know some things and one is that market rallies of this sort are typical the morning after a plunge and have less to do with what’s in the news than purely technical factors. Of course, there was some news this morning, and it may have had an effect, but the press often ascribes to rational causes short-term market moves that have more to do with the market watching itself than changes in the economic outlook. In short, I agree, nobody knows nothing.

    1. Jeremy,

      Don’t think that I don’t know people have actual knowledge in the finance world. Of course they do. They study data and history, create charts, sell in May and go away, etc. All I am saying is no one really knows what will happen. I do know that some people will get it right (we just don’t know which ones). Most will get it wrong (and we don’t know who they are either). Nobody knows anything about the future but they sure have a lot of opinions about it.

      1. Economists have been traditionally wrong, no one predicts anything, no one knows. Chartists assume that the market is all about rational behavior most of it is human behavior and feelings which are unpredictable. What we think will happen may not happen but what we feel might happen can influence what actually will happen but memories are short and that can change on a daily basis.

        I own a business and I get fearful because what if no one buys my product? Sales people are happy when they sell and feel insecure when they don’t. These wild mood swings and “feelings” influence the economy more than anything else.

        In my neighborhood people are tearing down their houses now and rebuilding them. People drive by amazed. They do this based on their confidence in the social media economy even though that is not their line of business and they know nothing about it. The recent IPOs have inspired confidence yet there are not enough people to fill those jobs and they have to hit the ground running according to experts. Then there are all these people out of jobs that find those jobs nerdy or boring. We will go back to the time when people worked to earn a living primarily not to have fun or self fulfillment. What will happen to the profession of psychology when that happens? How will relationships be defined in the future? Will we go to global values of marriage as a partnership based on the values of a business partnership with the western idea of romantic love put aside. No one knows but I feel it coming….

        1. This may actually get this country to really focus on the debt like we never have before. It could actually turn out to be a positive.

        2. Great post, Yiyta. I absolutely agree with you about the crazy social media IPO hysteria going on. You might enjoy this blog from a couple of days ago (before serious issues took hold):


          The craziness around LinkedIn really drove me nuts. I know those guys at LInkedIn – they are not long timers. They will leave that company as soon as they can cash out and find the next big thing. LinkedIn and companies like it are too boring for people like that – the people that love the chase. Silicon Valley is full of them (Paul Graham – unbelievable, that guy). Talk about something that desperately needs a “reset” – it’s that whole incubator mentality. Drop out of school, we’ll develop your flimsy idea and turn it into something worth (at least) $1 billion. Because $900 million is for losers. Weird times. It would be more exciting and fun if I didn’t personally have so much money on the line.

  2. If the American economy sinks back into recession again the taxpayers will be protected. There won’t be any more stimulus spending, the Republicans will see to that. I doubt the Fed can lend money at negative interest rates. And with capital gains turning to losses there won’t be any taxes there.

  3. You can thank George W. Bush for this mess. And, of course, it would be rude to forget your Republican congress. But, alas, President Obama will lead us out of this mess (after his re-election) just like he cleaned up Bush’s mess by getting bin Laden.

  4. We need infrastructure rebuilding badly, and there are Americans who need jobs badly. HEL-LO. Employed Americans spend money, pay bills….

  5. So S&P was supposed to issue a downgrade for the U.S. but it turns out, according to the Obama Administration, their math was off by trillions. TRILLIONS?! The global economy isn’t fragile enough and there are people out there missing on the math by TRILLIONS?! Jesus fucking Christ.

  6. A single private company should not have this much control over the global economy. This is a pure manifestation of how private enterprise’s entrenchment in our political system is poisoning this country. It’s come time to dismantle Wall Street and bring this country back to the people for which it is intended.

  7. I absolutely agree with you, Jill. Have you seen all the stories out there. Half the people saying it’s the end of the world and the other half saying ‘eh’. We’ll know when we know. Nobody knows anything.

  8. I for one took a bath when ARO decided to step on a land mine and release bad news on the wrong day. Apparently I lost ~3.5% of my portfolio value because of denim. There was absolutely no way anyone could have (or did) predict that this would happen… And I’m still confident that value stocks will outperform the market over the long term.

    All we can do is return to our valuations and try to make the best of a bad situation by finding new places to allocate our cash. Check my blog at http://thevaluemajor.com. I disagree about Buffett not knowing anything- he at least knows what he doesn’t know.

    1. Hey Value Major,

      I agree with you about the ratings agencies. As corrupt a thing as I have seen in a while. Of course it’s all political. This was a calculated move to hurt the administration – plain and simple. U.S. reputation means nothing to these people wh will do anything it takes to crush those that oppose them. It’s frightening really.

      As for Warren Buffett – agreed he does know what he doesn’t know. But, I can guarantee you, he doesn’t know what the market will do on Monday. Nobody does.

      1. It’s definitely not a coincidence that they dropped this particular bomb at this particular moment. Who are they kidding anyway? They aren’t going to have any impact whatsoever on the market for treasuries, that much is certain.

        I’m expecting the worst on Monday- that way I can’t be disappointed.

  9. Very true that no one can predict day to day swings – but you’re missing the point. If the market drops by 2500 over 18 months, or goes up by 2500 hundred over 18 months -it points to an orderly system that ‘the street’ loves…because brokers make their commissions in good times and in bad. But wild gyrations indicate disorder and dysfuntion…and Wall Street hates choppy seas. 2008 was the front edge of the hurricane. We have been living in the eye of the storm for the past two years. Unfortunely, in those two years Congress has avoided fixing the fundamental problems that started the whole mess.

    Anyone who has ever lived through a hurricane understands the real damage is done by the back side of the storm. As Hurricane Camille said to the coconut tree…’Hang on to your nuts.’

    Everyone was overjoyed that the Cannes film market was the most robust since before 2008…that buyers were coming back to the film markets with real cash. But real storm clouds are brewing for AFM…should Europe’s financial markets seize up…or should Spain or Italy go belly-up…Star Trek, Superman, or The Avengers will pre-sell for about 1 shilling…assuming that any buyers have the 1 shilling left.

    1. Right, Prancerberg – but the point is no one knows when the crazy unpredictability is going to happen. Sure, the street hates it. Investors hate it, too. But there are several people out that claim to know exactly what will happen and they happen to be in charge of a great deal of people’s money. I think all investment advisors really need to tell their clients that anything could happen and nobody really knows anything. But, then, of course, they would have no clients if they said that. The street will make a lot of money on Monday when people sell their stocks. The problem will be they may not get that money back because a lot of people may be done with the market for a while. I hope not and cooler heads will prevail. Earnings are great Jobs can come back as long as earnings stay great. Panic kills everything.

  10. You know what? This may actually get the U.S. to focus on this problem and it may end up being a positive – which could translate to higher stock market on Monday. It could happen.

  11. One of my all-time favorite quotes. Remembering it often will eliminate a lot of problems and heartache and put oneself way ahead of others who seem to want to know the future and think someone or themselves can predict it or see it. Then you get even more problems when the future doesn’t unfold in the anticipated way and all the rationalizing and bizaree behavior tries to justify the first error.

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  13. How can you claim to be a media analyst when you understand absolutely nothing about it. Do you have any training or do you just claim it???
    You contradict yourself so many times and your examples have no relevance- Facebook MUST be destroyed…oh wait, no it’s going to crumble by itself…. what the fuck.

    Pretty much all the big media corporates sell their users data, it’s a valuable source of income when you’re offering a free service. What they do give away is very carefully selected and not at all like you have claimed in these comments.
    Take google for example- they tailor their ads just like facebook. Ever noticed you’re gmail ad’s depend on the content of your emails? Have you forgotten the way they have tried to dominate interactivity on the net- buying youtube and changing it so you need a google account.

    You make it look like there is some hidden agenda on their mind, shock blogging, blogging by idiots, for idiots.

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