Wednesday, August 27, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Stock market logic not always logical

stevenson column sig

By
From page B7 | September 08, 2013 |

I remember one thing from my freshman philosophy course. Most all of us know it instinctively, except for some stock market commentators.

It’s the “analysis” that says, “after this, therefore because of this.” The example used, which I’m sure has been expunged from textbooks, was when it rains after a rain dance is done. The belief is that the change in the weather was caused by the dance.

Well, some analysts and the stock market channels are occasionally guilty of that kind of logic. So Friday, when the closely watched monthly employment report came out and  showed a somewhat weaker economic recovery than predicted, the comment was made that the early selloff in the market was due to a sign of a “fizzle.”

But wait! No, it was a report that there was more friction than expected between Russia and the United States at the G-20 summit in St. Petersburg.

When the market turned up, the word was that the August economic report was not that bad when it came in at 7.3 percent unemployment with 169,000 jobs created. Further, the astute observation was made that investors had “shrugged off” the reports that the Russians would continue to back their Syrian friends regardless of what we did.

Here’s the key to getting paid an obscene amount of money to talk about the economy: simply follow the up-to-the-minute market activity and any economic or political news. Then your job is to say that the two are related. If, later in the market day, we see a reversal of the earlier trend, tell us that investors were encouraged or discouraged by the news.

I’m keeping the stock market news on TV as I write this and there certainly is some intelligent commentary. One reporter said the number of “discouraged” would-be workers was at a worrisomely high number and that certainly was something to pay attention to. I’ve been a news addict for as long as I can remember, but I’m not sure whether it helps in predicting market direction.

I would, however, pay attention to comments from a few famous, and infamous, market observers. Perhaps the most important remarks would come from Federal Reserve or Treasury officials. It was a legendary observation that Fed chairmen would never say what they intended to do about interest rates. However, they would make comments that, like the ancient Delphian oracle, had to be interpreted to be understood.

It was unheard of for a Fed chairman, or a Treasury secretary, to say something direct about interest rates. But make no mistake, even the slightest hint about Federal Reserve policy could move the markets. Professional observers who had a better-than-average record in stock or bond market forecasting were well rewarded.

With the advent of the Internet, anyone can become an “expert” on various markets, but whether it’s easier to make money now is doubtful. If you’re a contrarian, you would just as soon keep a successful source of advice restricted to the “privileged” few.

If you remember the market of 1999 and 2000, you know that Internet-related stocks were the place to be. There was an Internet stock that had an initial public offering at $10 or $15 and immediately shot up to around $100. It only stayed at that ridiculously high price for a few seconds, but that gives you an idea of how feverish the market was.

There were a few observers who saw the crash coming, but they were in the minority. These days, of course, we can all sit at our computers and become millionaires. But remember the old piece of advice: It’s easy to become a millionaire in the stock market.

Just start out with $2 million.

Bud Stevenson, a retired stockbroker, lives in Fairfield. Reach him at Bsteven254@aol.com.

LEAVE A COMMENT

Discussion | No comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

.

Solano News

Walnut Grove: Fun facts, things to see

By Susan Winlow | From Page: A1, 1 Comment

 
Ryde Hotel: A speakeasy from the past

By Susan Winlow | From Page: A1, 2 Comments | Gallery

Walnut Grove shows a bit of historic Japan

By Susan Winlow | From Page: A1 | Gallery

 
Solano County supervisors get raise

By Barry Eberling | From Page: A2, 10 Comments

Solano supervisors declare quake state of emergency

By Barry Eberling | From Page: A3

 
Weather for Aug. 27, 2014

By Daily Republic | From Page: B3

Solano helps after Napa quake

By Barry Eberling | From Page: A3 | Gallery

 
 
 
Solano promotes hand washing

By Barry Eberling | From Page: A5, 2 Comments

Learn about local travel opportunities

By Amy Maginnis-Honey | From Page: A6

 
Solano College to host college transfer fair

By Susan Winlow | From Page: A6

Golf tournament to benefit college sport’s teams

By Susan Winlow | From Page: A6

 
Man steals car from Fairfield resident

By Barry Eberling | From Page: A6, 6 Comments

 
Pierce Brosnan thriller kicks off week’s new films

By Amy Maginnis-Honey | From Page: A7

Museum guild schedules trip to historic San Francisco home

By Amy Maginnis-Honey | From Page: A8

 
 
 
3 die in I-680 crash; 2 from Vacaville

By Ian Thompson | From Page: A9, 10 Comments

 
Suisun City police log: Aug. 24, 2014

By Glen Faison | From Page: A12

Suisun City police log: Aug. 23, 2014

By Glen Faison | From Page: A12

 
Fairfield police log: Aug. 25, 2014

By Susan Hiland | From Page: A12

Suisun City police log: Aug. 25, 2014

By Glen Faison | From Page: A12

 
Fairfield police log: Aug. 24, 2014

By Glen Faison | From Page: A12

Fairfield police log: Aug. 23, 2014

By Glen Faison | From Page: A12

 
.

US / World

Los Angeles schools halt iPad deal amid criticism

By The Associated Press | From Page: B8

 
Report finds 1,400 children exploited in UK town

By The Associated Press | From Page: B8, 1 Comment

Police: Slain woman ID’d ex-deputy as her attacker

By The Associated Press | From Page: B8

 
Officials: Instructor accidentally killed by girl

By The Associated Press | From Page: B8, 11 Comments

Judges blast Indiana, Wisconsin gay marriage bans

By The Associated Press | From Page: B8

 
UN panel: Global warming human-caused, dangerous

By The Associated Press | From Page: B8, 1 Comment

Obama defends handling of veterans affairs issues

By The Associated Press | From Page: B8, 10 Comments

 
American woman held hostage in Syria

By The Associated Press | From Page: B8

Arab strikes in Libya show impatience with US

By The Associated Press | From Page: B8, 1 Comment

 
AP sources: US surveillance planes fly over Syria

By The Associated Press | From Page: B8, 2 Comments

Napa quake stirs clamor for warning system

By The Associated Press | From Page: B8

 
Putin and Poroshenko meet for bilateral talks

By The Associated Press | From Page: B8, 1 Comment

Group files petition to idle coastal nuke plant

By The Associated Press | From Page: B8

 
Israel, Hamas agree to open-ended Gaza cease-fire

By The Associated Press | From Page: B8, 1 Comment

.

Opinion

Editorial cartoons for Aug. 27, 2014

By Daily Republic Syndicated Content | From Page: A11

 
Question of the week: Is US policy on hostages correct?

By Daily Republic | From Page: A11

Obama risks alienating Latinos from Dems

By Thomas Elias | From Page: A11, 1 Comment

 
How to reduce taxes without busting the budget

By Ramesh Ponnuru | From Page: A11

 
Abandoned carts are everyone’s responsibility

By Letter to the Editor | From Page: A11, 12 Comments

.

Living

Today in History: Aug. 27, 2014

By The Associated Press | From Page: A2

 
Community Calendar: Aug. 27, 2014

By Susan Hiland | From Page: A2

We were good parents. Why won’t our adult children help us out?

By Kathy Mitchell and Marcy Sugar | From Page: B6

 
Horoscopes: Aug. 27, 2014

By Holiday Mathis | From Page: B6

Choosing chutney

By Mcclatchy-Tribune News Service | From Page: B7

 
Banishing the blues with healthy blueberry muffins

By Sara Moulton | From Page: B7

.

Entertainment

Miley Cyrus’ date wanted by Oregon police

By The Associated Press | From Page: A7

 
NBC’s Emmycast logs robust 15.6 million viewership

By The Associated Press | From Page: A7

TVGrid

By Daily Republic Syndicated Content | From Page: A7

 
Women talk about sports on CBS Sports Network

By The Associated Press | From Page: A7

.

Sports

Serena Williams beats American teen at US Open

By The Associated Press | From Page: B1

 
Carter’s HR in 8th leads Astros over A’s 4-2

By The Associated Press | From Page: B1 | Gallery

US teen Bellis, 15, stuns Cibulkova at US Open

By The Associated Press | From Page: B1

 
Raiders CB DJ Hayden to start season on PUP list

By The Associated Press | From Page: B1

49ers prepare for possible Aldon Smith suspension

By The Associated Press | From Page: B1

 
TMS 2015 schedule springs back to night race

By The Associated Press | From Page: B2

 
Love struck: Kevin Love pledges commitment to Cavs

By The Associated Press | From Page: B2

Sarkisian: USC looking into Shaw’s heroic story

By The Associated Press | From Page: B2

 
Davis, US men beat Slovenia in basketball exhibition

By The Associated Press | From Page: B2

Latest Astrodome proposal: massive indoor park

By The Associated Press | From Page: B2

 
Bumgarner flirts with perfection, finishes with 1-hitter in Giants win

By The Associated Press | From Page: B2 | Gallery

No reason to feel sorry for Jim Furyk

By The Associated Press | From Page: B2

 
.

Business

UN health agency urges crackdown on e-cigarettes

By The Associated Press | From Page: B8, 1 Comment

 
Survey: US consumer confidence near a 7-year high

By The Associated Press | From Page: B8, 1 Comment

Burger King buys, plans expansion of Tim Hortons

By The Associated Press | From Page: B8, 1 Comment

 
.

Obituaries

Lyle Cullum

By Nancy Green | From Page: A4, 1 Comment

 
Florentino”Paul” Castaneda Bersola

By Susan Hiland | From Page: A4

Nadine L Wetherell

By Susan Hiland | From Page: A4

 
.

Comics

Baby Blues

By Daily Republic Syndicated Content | From Page: B5

 
Frank and Ernest

By Daily Republic Syndicated Content | From Page: B5

Zits

By Daily Republic Syndicated Content | From Page: B5

 
Rose is Rose

By Daily Republic Syndicated Content | From Page: B5

B.C.

By Daily Republic Syndicated Content | From Page: B5

 
Wizard of Id

By Daily Republic Syndicated Content | From Page: B5

Sally Forth

By Daily Republic Syndicated Content | From Page: B5

 
Garfield

By Daily Republic Syndicated Content | From Page: B5

Dilbert

By Daily Republic Syndicated Content | From Page: B5

 
For Better or Worse

By Daily Republic Syndicated Content | From Page: B5

Pickles

By Daily Republic Syndicated Content | From Page: B5

 
Get Fuzzy

By Daily Republic Syndicated Content | From Page: B5

Baldo

By Daily Republic Syndicated Content | From Page: B5

 
Blondie

By Daily Republic Syndicated Content | From Page: B5

Beetle Bailey

By Daily Republic Syndicated Content | From Page: B5

 
Peanuts

By Daily Republic Syndicated Content | From Page: B5

Crossword

By Daily Republic Syndicated Content | From Page: B6

 
Word Sleuth

By Daily Republic Syndicated Content | From Page: B6

Cryptoquote

By Daily Republic Syndicated Content | From Page: B6

 
Bridge

By Daily Republic Syndicated Content | From Page: B6

Sudoku

By Daily Republic Syndicated Content | From Page: B6