A Data Junkie Looks at the News

Many years ago, when I was a poor and humble graduate student, I taught the prep course for students taking the GMATs and LSATs. I understood the internal logic and game theory needed to succeed on standardized tests, and could explain techniques used to do well on them.

One of the keys to succeeding on these tests was to have strong reading comprehension skills. Toward that end, I taught what I like to call active reading. It required the reader to approach text in a rigorous and logical way, challenging each sentence to find assumptions, false statements and deductive errors. Think of it as logical skepticism.

I still use these muscles everyday. I can randomly pick up any newspaper article or analyst report, and find holes and flaws merely by asking questions the author left unanswered. Active reading often leads to the conclusion that the vast majority of news is at best incomplete and uninformative, while a majority of research reports are full of biases and logical errors.

That is a pretty bold statement, and to demonstrate this, I am going to take a random article and dissect it using logical skepticism. When I am finished, you will have a better understanding of why I often say “Lose the News.” I hope you never look at media noise in the same way.

Yesterday, an article decided to take stock of investors’ concerns, quoting many strategists and managers. I chose it because it was well-written and researched, and offered the perspectives of many strategists. However, this exercise can be done with any article or research piece written by anyone anywhere.

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Category: Data Analysis, Investing, Markets, Really, really bad calls

10 Tuesday AM Reads

Here are our morning reads, sourced exclusively from a craft brewer located in Brooklyn (continues here): • Before Jackson Hole, roundup of Yellen’s quotes on the labor market (FT Alphaville) see also Part-Time Workers a Full-Time Headache on Yellen Radar (Bloomberg) • Morningstar: A force to be reckoned with (FT) • All You Need to…Read More

Category: Financial Press

Quantifying the impact of chasing fund performance


Category: Hedge Funds, Investing, Think Tank

Crisis Chronicles: The Hamburg Crisis of 1799 and How Extreme Winter Weather Still Disrupts the Economy James Narron, David Skeie, and Don Morgan Liberty Street Economics     With intermittent war raging across much of Western Europe near the end of the eighteenth century, by about 1795, Hamburg had replaced Amsterdam as an important hub…Read More

Category: Think Tank

A History of Executive Orders

Source: WonkBlog

Category: Politics

10 Monday PM Reads

My afternoon train reads: • When “Process” Meets the Real World (Reformed Broker) • Housing Affordability Hits Six-Year Low (Real Time Economics) see also Why Housing Isn’t As Cheap As It Looks (Real Time Economics) • The leverage clock tolls for thee (FT Alphaville) • The great exodus out of China (WSJ) • 60:30:10 is…Read More

Category: Financial Press

In Stock Market, Anxiety Can Be Good Thing

Source: WSJ

Category: Digital Media, Investing, Sentiment

10 Monday AM Reads

It’s time to start your week off right with our hand-selected artisanal reads: (continues here): • Federated Investors: Get Ready for S&P 2500 (Barron’s) versus Spuds Powell, Master of Disaster (Barron’s) • Secular Stagnation: Facts, Causes and Cures (Vox EU) • The Mystery of Lofty Stock Market Elevations (NYT) but see Under What Circumstances Should You…Read More

Category: Financial Press

Why should investors care about geopolitics?

One of the concerns for investors is how markets keep powering higher despite all of the geopolitical turmoil: The grinding Syrian civil war that has spilled into Iraq, the clash between Israel and Gaza, the Crimea annexation and now the confrontation between Russia and Ukraine. That thinking gets the issue precisely backward. The proper question…Read More

Category: Investing, Markets, Psychology, War/Defense

Private Equity: The Numbers

Barron’s notes that Q3 2014 has been good to Private Equity firms: $50 billion: U.S. private-equity fund raising in the second quarter, a near doubling from the first quarter -3%: sequential decline in total equity financing for U.S. leveraged buyouts $440 billion: callable capital reserves, or “dry powder,” rose to this level sequentially -21%: decrease…Read More

Category: Venture Capital