Monday, March 26, 2007

Why I love the news


Never thought I am such a fan of news, heh?
Read on, let me illustrate with the following news from reputable publishing houses.
Its an observation made which has never cease to amuse me. :)

Dow Average, S&P 500 Advance as Higher Oil Lifts Energy Shares
March 22 (Bloomberg) -- The Dow Jones Industrial Average and Standard & Poor's 500 Index advanced for a fourth day as a surge in oil prices lifted energy companies.

I see, as oil prices go up, stocks will go up. OK. Got it.

Dow: 5-Day Rally, Back In Black
NEW YORK (CNNMoney.com) -- Stocks inched higher Friday, gaining after unexpected strength in home sales, but worries about rising oil prices limited gains.

OK, if there was no worries that oil prices may go up, stocks would have gained more. OK. Got it.
WAIT a minute... I thought, when oil prices go up, stocks will gain? But how come now oil prices' potential to go up, and stocks are limited from rising? Hey, something's not quite right here...

Well, hold on your horses. There's more :)

U.S. Stocks Rise on Employment, Wage Growth Data; GM Advances
Sept. 1 (Bloomberg) -- U.S. stocks rallied to four-month highs after the government said employers added more jobs and wage increases slowed last month, easing concern that higher interest rates would lead to an economic slump.
Ah, this rationale is simple - more jobs, means economy is good. And economy good, I suppose it means stocks will go up. OK. Got it.

U.S. Stocks Advance, Sending Dow Average to Third-Highest Close
May 5 (Bloomberg) -- U.S. stocks surged, sending the Dow Jones Industrial Average to its third-highest close ever as a smaller-than-forecast increase in the number of jobs last month eased inflation concerns
Ah, logical indeed. Lesser jobs, means economy not so good. Economy not so good, Federal Reserve (US' equivalent of Bank Negara) would not raise interest rate. And that means borrowing costs will not increase. So, stocks go up. OK. Got it.

WAIT a minute! Which is which now? So I know more jobs during good economy and less when bad economy. But good economy = stocks up right? Or bad economy = stocks up? Hmm, or did I even get the jobs as an indicator of the economy correct? :P

The human mind constantly look for reasons as to why things happen the way they do. It is our nature to find the reason. The journalists merely provided the justifications we so seek. Often with much logic in it that we cannot distinguish between what is real and what is not. It is said, "If you re looking for a bull, everything looks like a bull. If you re looking for a bear, everything looks like a bear." The human mind merely recognises the pattern which we so want to seek.

Stay objective. Don't believe everything you've read or heard. Stay objective.

2 comments:

Anonymous said...

News are contradicting among themselves... hate it. Mislead the readers.

Trader Max said...

Fun observation heh?