Note to Self: The Only Market That Matters is YOU!
When the headlines claim “The Market is off,” followed by scary numbers to get your blood pumping, remember it might not be true. When he wrote the book “How to Lie with Statistics,” Darrell Huff noted that “big data” is always a matter of perspective; Our job is to try to understand data and then take action. Of course, any number of data points can sell a story, discover correlations and causes and - at worst - assign blame to someone.
Most information lasts a minute - but the misunderstanding always lasts much longer.
Compare this week's economic data to some of the data in a decade and you can easily feel powerless. Compare a chart today with trends a few perfect months a year ago - and you can reinforce any worries. But change the data points - the starting point or sample size - and you can easily be convinced -
Things are better than the "data" shows.
The key is to remain SKEPTICAL; to challenge claims and ask: “How do you know?” Skepticism requires us to dig into the data, and identify the perspectives: Because one person’s downward chart is the starting point of another person’s upward trend.
There is no single “market” anywhere, ever. What's more - consumers don't go around referencing 1980s data in 2021 - or even 2020 data, for that matter - when they have to make decisions TODAY.
Because markets don’t really exist - and market data is a description, not a Thing.
What DOES EXIST is the market YOU make. The one you make happen by dealing with the here-and-now. Not the one that “looks better or worse as a trend” compared to a time and date we cannot affect any longer.
As Huff wrote so long ago:
“A difference is a difference only if it makes a difference.”
And some data really doesn't make any difference.
That REAL difference doesn’t lie in the statistics of the market.
It lies within YOU!