Did the Media Help us Call a Bottom Again?by JakeGint on October 20th, 2008 at 3:00 pm |
(17 votes, average: 4.65 out of 5)
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I got this from one of my smarter friends, let’s call him “Matt from Monsanto.” He works for aforesaid genetic seed manufacturer Monsanto Company [[MON]] and played a large role in getting me long that stock back under $15 (pre-split) some years back. He’s a statistics whiz, and also runs some money for relatives on the side, whilst “keepin’ it real” down in Rajun Cajun Country with an armload of little chillens.
Matt’s specialty is statistics, and he’d be the first to tell you the above graph doesn’t have nearly enough time in it to create a significant statistical inference. However, it is interesting to note how the hysteria seemed to peak in that first week of October, as far as the media goes. Remember how we were all walking the aisles of Dick’s Sporting Goods that week, looking for the “Extra carbon fiber reinforced athletic cups?”
In any case, I’ll leave the explanation of the above in Matt’s words, for your consideration:
I had this idea a couple of weeks ago– Starting in early September, I decided to chart the number of news references in Yahoo News’ news search each day that contained the words “financial” and “crisis.” I figured watching these data might show when the press and therefore the public has become saturated with “news” about the financial crisis and therefore it might indicate the bottom for the market on this particular sell off. I also plotted the SPY on the chart for market reference.
The news count is an interesting data series and it shows a lull each weekend (Friday, Saturday, and Sunday are lower news days). But notice last week the peak news count was lower than the previous and the low over last weekend was lower than the previous weekend. This would indicate that the “financial crisis” is “over” as far as the news media are concerned and if that was the primary driver for the market panic then that might indicate the sell off is over for now. Just food for thought.
Comments appreciated.
Those monsanto guys are smart…for being undead.
October 20th, 2008 at 3:15 pmGood stuff, Jake. Thanks.
October 20th, 2008 at 3:18 pmVery nice. This is the sort of data that ends up in the experienced trader’s “intuition bucket”. Definitely a signal not to press the downside.
October 20th, 2008 at 3:24 pmCNBC blows.
October 20th, 2008 at 3:27 pmHaha…he should e-mail that to Dylan@CNBC.
October 20th, 2008 at 3:30 pm“CNBC blows.”
That implies that someone in their audience is satisfied.
October 20th, 2008 at 3:36 pm5 stars.
I have no respect for the media, even though they are a profitable contrary indicator.
Thank you, asshats.
October 20th, 2008 at 3:37 pmAnton,
October 20th, 2008 at 3:39 pmCareful. You are making an assumption that they are good at something.
Alpha: And you think Dennis Kneale “got where he is today” because he’s a competent reporter?
October 20th, 2008 at 3:46 pmBTW, Jeff Zucker is on the cover of “Portfolio” this month, the “Highlights Magazine” of business publications, and he has that “satisfied CNBC audience member” smirk on his face.
I’m just sayin’.
October 20th, 2008 at 3:51 pmGreat graph JG
I’ve gotten this email below 5 times over the last 2 weeks: you don’t get these at market tops.
————–
NEW STOCK MARKET TERMS :
CEO –Chief Embezzlement Officer.
CFO — Corporate Fraud Officer.
BULL MARKET — A random market movement causing an investor to
mistake himself for a financial genius.
BEAR MARKET — A 6 to 18 month period when the kids get no
allowance, the wife gets no jewelry, and the husband gets no sex.
VALUE INVESTING — The art of buying low and selling lower.
P/E RATIO — The percentage of investors wetting their pants
as the market keeps crashing.
BROKER — What my broker has made me.
STANDARD & POOR — Your life in a nutshell.
STOCK ANALYST — Idiot who just downgraded your stock.
STOCK SPLIT — When your ex-wife and her lawyer split your
assets equally between themselves.
FINANCIAL PLANNER — A guy whose phone has been disconnected.
MARKET CORRECTION — The day after you buy stocks.
CASH FLOW– The movement your money makes as it disappears
down the toilet.
YAHOO — What you yell after selling it to some poor sucker
for $240 per share.
WINDOWS — What you jump out of when you’re the sucker who
bought Yahoo @ $240 per share.
INSTITUTIONAL INVESTOR — Past year investor who’s now locked
up in a nuthouse.
PROFIT — An archaic word no longer in use.
October 20th, 2008 at 4:32 pmI am attempting to get my buddy to sign up for the PEEG.
He is a font of interesting little investing analyses.
Should be a crowd favorite right away, I should think.
___
October 20th, 2008 at 5:33 pm[...] II: Â Be sure to check out the previous post in the PG. Â It’s one of the best I’ve [...]
October 20th, 2008 at 6:57 pmfuck you monsanto, you and your cancer causing seeds and paying off media that tries to show how fucked they are.
October 20th, 2008 at 7:34 pmfuck, if that’s all it takes for a bottom, I’m going to have it be searched for 1 billion times a day
October 20th, 2008 at 7:36 pmwhat’s the PEEG?
October 20th, 2008 at 7:37 pmGood Stuff Jake,
Did you guys see this?
http://www.youtube.com/watch?v=SWt1tGTHdkc&feature=related
This is how I know we go lower.
October 20th, 2008 at 8:01 pmHoly Shit did you see him….Head on a swivel..stay low deliver a blow…talk amongst yourselves!
I’d say that the tension ratcheted up to a maximum that week, say peaking maybe on Monday/Tuesday, and since then we are releasing that tension.
Where that leads the market, I know not, but I don’t necessarily think it means we have hit a solid bottom yet. Maybe just that folks realize how fucked up the situation is, and they are resigning themselves to it.
October 20th, 2008 at 8:21 pmHe/Somebody should continue to track this…I bet we could start timing the market tops with it, too, especially if there was a concurrent search for the opposite of ‘financial crisis’. Whatever the buzzword(s) may be for a bullish market.
October 20th, 2008 at 8:32 pmConstipato –
That’s my nickame for the Peanut Gallery — i.e., “PG” which when you say it, sounds kinda like “Peeg.”
Depending on how you say it…
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October 20th, 2008 at 8:33 pmKC — he’s probably a Tiger alum.
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October 20th, 2008 at 8:38 pmAt a minimum he is a Cock hater.
October 20th, 2008 at 8:48 pmi do something similar. i’ve also been using “gold” (in combination with other words) as its s/n ratio is a LOT better.
if you don’t want to bother with this kind of effort, let others do the googley thinking for you:
http://trends.google.com/trends?q=financial+crisis&ctab=0&geo=all&date=mtd&sort=0
(date range on the top right)
It shows searches AND news (note the usual weekend dip that you’re going to have to ignore)
October 21st, 2008 at 12:12 amWhy does it take a statistician to say this? And why are you even quoting him? That’s lame.
Any average trader already knows this.
Analysis paralysis you have.
October 21st, 2008 at 7:10 amThis is DESCRIPTIVE, not PREDICTIVE.
October 21st, 2008 at 8:21 amJake, not sure if you’ll get an email for this or not… but go here quickly… http://www.happyhourspro.com/store/wtso/html/store/index.htm
November 13th, 2008 at 2:11 pm