Bull vs Bull – Assumptions are the Termites of Relationships

“Assumptions are the termites of relationships.” – Henry Winkler

By Ed Emerson

That quote (above) is as true in the office of a marriage counsellor as it is on Wall Street; speculation leads to dysfunction. 

And who can really be blamed for an assumption or two here at the broad end of the market information fire hose, eh?

A sprinkle of recency and confirmation bias, a dash of media analysis, some office for national statistics (ONS) input (coming soon to a retraction near you) and a helping of Uncle Fred’s “Fredly advice”; that unruly-haired relative who gave up his media sales day-job to become a day-trader in the currency markets (and who now wears tin foil under his baseball cap so the aliens can’t “hear” his thoughts).

But when did the facts become facts just because everyone keeps repeating them?

Not to pick on the ONS (but I’m gonna), they might offer up some of the worst economic guesswork going. 

Take the words of Scotland’s very own Sage of Linlithgow, Alan Steel, who in his article Gross Distortion Predictions (GDP), writes: “…the quiet admission hidden away in the digital ethers by the Office for National Statistics some months ago that they’d just discovered their UK GDP “findings” were actually wrong for the previous 15 years thanks to some error or other in their theoretical calculations.

“Oops! And this kind of thing is nothing new. It’s common knowledge now that when George Bush Senior lost out to Bill Clinton in the 1993 US elections it was due to his alleged mismanagement of the US Economy, thanks to “Official” GDP estimates at the time showing the economy was tanking. However, after a good few years of checking and re-checking, the nerds decreed they’d miscalculated; US GDP had been positive instead. Beating around the Bush anybody?”

The tripartite nature of the bankrupt investor soul comprises; spurious correlations, recency and confirmation bias and value chasing. And you can’t find religion on Wall Street.

Pax vobiscum. 

Or should I say Nullius in Verba – “Take no one’s word for it.”

And just to put a finer point on this, I’ll refer to the aforementioned Alan Steel who pointed me towards an article by Maria Popova on Brain Pickings about writer Joseph John Campbell who saw the greatest human transgression as “the sin of inadvertence, of not being alert, not quite awake.”

Market perspectives rarely come neatly wrapped. Check out everything, or the termites will.  

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Emerson

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