At about 8:30 a.m. yesterday, Yahoo!’s Tech Ticker posted an interview with Barry Ritholtz, noted finance guy and blogger. In recent times, he has also been very bearish on the market.
But he thinks the bottom may be near. Here’s his money quote from the interview: “There’s a big bear market rally coming.”
Seven and a half hours later, the Dow had risen 5.8 percent.
So was this a case of causality, or merely correlation?
Probably about as much causality as the typical explanations of stock-market movements. If there really was a specific reason behind yesterday’s spike, it probably had to do with Citibank, not Ritholtz.
But given his excellent timing in this case, I wouldn’t be surprised if a lot of people got out their wallets the next time they hear him speak.
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Thanks for the compliment — too bad its more correlation than causation.
We recorded that on Monday afternoon, and they posted it early Tuesday. But if you looked at the US Futures market, you can see they were very strong once Asia opened up big.
Chalk it up to fortuitous timing more than anything else . . .
Note: This was A bottom; whether its THE bottom has yet to be determined.
I also noticed on today’s citi statement that my due date has advanced by a week.
I posted this earlier and sincerely hope that this cite is censoring dissenting points of view.
I loved Mr. Dubner’s book but I find the laudatory tone towards Mr. Ritholtz’s stock market predictions missplaced.
Over the past five years, he placed 59th out of 60th (bottom) in a review of yearly predictions done by Business Week and CXO Advisory.
http://www.erictyson.com/articles/20090207
interesting post since you guys just posted this cartoon
http://freakonomics.com/2009/03/09/correlation-vs-causality-the-cartoon-version/
I also don’t see why Citi has must to do with an over all bounce. Give me some money at Zero interest and I’m sure i could turn out a small operating profit too.
These claims are getting more and more ridiculous, more on that here http://www.inferiorpolitics.com
A few clarifications:
First, Fusion has been managing money for 2 years. Whoever claims to have an account with us for 3 years is misinformed. (There are numerous funds on our platform but other managers run them, not me)
Second, I have long said forecasts are folly, and predictions are for fun, not for profit. Guessing where the market is going to be 12 months from now is just that — a random guess. See this for more details: http://www.thestreet.com/_tscana/comment/barryritholtz/10226887.html
Related tot hat is the CXO stuff. Its kinda weird. Aside from rewarding groupthink — just add 10% to the year’s close and be safe — they pulled only 3 years (not 5) from the Businessweek annual forecasts, ignored other elements there that were very good (sector picks, stock picks etc.) As these things randomly go (a little mean reversion), the next year (2007) I was at the top of the heap, and of course, Businessweek didn’t run its full annual forecast.
It ran in the WSJ instead. See this.
http://online.wsj.com/article/SB116671139892256725.html
and
http://www.ritholtz.com/blog/2008/01/media-appearance-cnbcs-squawk-on-the-street-11008/
In 2008, I was the most bearish in the group — and was still too bullish by 4000 points.
But all of the above misses the real issue: Is the commentary insightful? Is it ahead of the curve? Can you learn things you don’t find elsewhere? Can it help to make you money?
If the answer to those questions are yes, then you will find the blog to be of value.
Phil Davis (Philstockworld) was on TV and called it on the 6th.
http://www.philstockworld.com/2009/09/10/stock-market-crash-year-one-review-iii-march-madness/