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Read It Here First: Rising Market Volatility

Posted By Barry Ritholtz On September 12, 2011 @ 11:15 am In Apprenticed Investor,Financial Press | Comments Disabled

The front page of today’s New York Times is a very interesting if rather familiar article on the increase in market volatility:

“With these whopping 4 percent swings — up 500 points, down 500 points, up another 500 points, down another 500 points — traders have whiplash. We saw another huge move down Thursday, when the Dow, Nasdaq and S&P all lost big, plummeting 3.68 percent, 5.22 percent and 4.46 percent, respectively.

What is going on? It seems that 4 percent — plus or minus — is the new black.”

Ooops, my bad, that was my column published August 19th in the Washington Post, titled Smacked by big market swings, investors should alter their outlook [1].

The NYTimes piece from today is called Market Swings Are Becoming New Standard [2], and it begins like this:

“Day after day, stocks swing sharply by hundreds of points. Last week they tumbled 3 percent in the first 90 minutes of trading on Tuesday morning, then on Wednesday closed nearly 3 percent higher and dropped almost 3 percent on Friday. All of this on the heels of unusual back-to-back 4 percent leaps and dives in one week in August.

Now traders head into the week with fresh worries about the chances that Greece will default on its debt and the havoc that would wreak on European banks.

All of this anxiety has caused experts to ask whether there are new forces at work in the stock market that make trading permanently more erratic.”

That’s also good stuff, but for investors, it is rather late to the party.

And that is the key to our Read It Here First series [3]. I am not suggesting that Louise Story in any way copped my piece. Hey, Volatility is out there, you would have to be blind to miss 500 point swings in the Dow.

But the point I want to make is that market practitioners/bloggers have advantages over Old Media in spotting these trends. Its always fun to beat the big guys to the punch on these things. Indeed, we had almost a full month head start. Other researchers, bloggers and strategists who cover markets do get to see their work bubble up eventually to the front page of the NYTimes.

We have been looking at “influence [4]” a lot lately, and it is gratifying to see the new media community influencing the debate (even if we have to use old media to do it!)

>

Previously:
The Most Volatile Market Ever [5] (November 25th, 2008)

Stock Market Volatility, Bank of America, Investing [6] (August 9th, 2011)

Sources:
Market Swings Are Becoming New Standard [2]
LOUISE STORY and GRAHAM BOWLEY
NYT, September 11, 2011   
http://www.nytimes.com/2011/09/12/business/economy/stock-markets-sharp-swings-grow-more-frequent.html

Smacked by big market swings, investors should alter their outlook [1]
Barry Ritholtz
Washington Post Friday, August 19, 2011 
http://www.washingtonpost.com/smacked-by-big-market-swings-investors-should-alter-their-outlook/2011/08/18/gIQAriG8RJ_story.html


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2011/09/read-it-here-first-rising-market-volatity/

URLs in this post:

[1] Smacked by big market swings, investors should alter their outlook: http://www.washingtonpost.com/smacked-by-big-market-swings-investors-should-alter-their-outlook/2011/08/18/gIQAriG8RJ_story.html

[2] Market Swings Are Becoming New Standard: http://www.nytimes.com/2011/09/12/business/economy/stock-markets-sharp-swings-grow-more-frequent.html

[3] Read It Here First series: http://www.ritholtz.com/blog/?domains=http%3A%2F%2Fwww.ritholtz.com%2F&sitesearch=http%3A%2F%2Fwww.ritholtz.com%2F&cx=015905226837203657063%3Ax1cwdcykvvw&ie=UTF-8&oe=UTF-8&cof=FORID%3A11&s=Search&q=Read+It+Here+First+&sa.x=0&sa.y=0#1025

[4] influence: http://www.ritholtz.com/blog/2011/09/tbp50-who-influences-you-the-most/

[5] The Most Volatile Market Ever: http://www.ritholtz.com/blog../2008/11/the-most-volatile-market-ever/

[6] Stock Market Volatility, Bank of America, Investing: http://www.ritholtz.com/blog/2011/08/stock-market-volatility-bank-of-america-investing/

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