Does Anyone Know Anything?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
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KnowNth
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Does Anyone Know Anything?

Post by KnowNth »

I only started to read financial/investment news and analysis a couple years ago. But I have been deeply frustrated by what I read and what really happened. Looks like the experts have an explanation for everything, THEN reality hits. And experts quickly have a new theory for the new reality.

For example, for the last few months, there are numerous articles explaining WHY VIX is so low. One of the top google search result is still "3 Reasons The VIX Is Low And Why It May Stay That Way" from Forbes. We all know what happened last week.

Now, the talk of the town is "Inflation is coming back big time" and even bogleheads has more than the usual share of TIPS discussions. But how do we know the inflation worry is real? How do we know whether the experts will be right this time?
alex_686
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Re: Does Anyone Knows Anything?

Post by alex_686 »

Yes and No.

First, Yes we do know what is happening. The "Wisdom of the Crowds" is very powerful in processing information. It is hard to outsmart them.

Second, No, we do not know what is happening. On the rational side, models and the Wisdom of the Crowd tends to be a little too certain. Things fall apart when put under stress. On the irrational side, read up on behavioral economics. Humans are excellent at making up post hoc rationalizations for what has happened.

Read up on theory, focus on the the long term, apply the wisdom and knowledge you have, and ignore the click bait headlines.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
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Pete12
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Re: Does Anyone Knows Anything?

Post by Pete12 »

Everything you need to know is here:
https://www.youtube.com/watch?v=A0gQiz0pCyI
TwstdSista
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Re: Does Anyone Knows Anything?

Post by TwstdSista »

I know nothing!
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Johnnie
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Re: Does Anyone Knows Anything?

Post by Johnnie »

The title of Friedrich Hayek's 1974 Nobel speech is suggestive: The Pretence of Knowledge

For my money it comes down to the seens vs. the unseens. You may know all about a lot of "seens," but a few big "unseens" can wipe you out.

I also think about Taleb's line that humans are lousy at making predictions but can't stop ourselves from trying, so we should only try to predict things that aren't very important (like whether we'll have rain for Saturday's picnic).

Short answer: See TwstdSista post above and my signature line below!
"I know nothing."
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Alexa9
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Re: Does Anyone Knows Anything?

Post by Alexa9 »

Nobody knows nothing. That's why we use stock and bond index funds. Own the haystack and the needles.
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bligh
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Re: Does Anyone Knows Anything?

Post by bligh »

No. We are all like Jon Snow.
H-Town
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Re: Does Anyone Knows Anything?

Post by H-Town »

KnowNth wrote: Fri Feb 09, 2018 4:27 pm I only started to read financial/investment news and analysis a couple years ago. But I have been deeply frustrated by what I read and what really happened. Looks like the experts have an explanation for everything, THEN reality hits. And experts quickly have a new theory for the new reality.

For example, for the last few months, there are numerous articles explaining WHY VIX is so low. One of the top google search result is still "3 Reasons The VIX Is Low And Why It May Stay That Way" from Forbes. We all know what happened last week.

Now, the talk of the town is "Inflation is coming back big time" and even bogleheads has more than the usual share of TIPS discussions. But how do we know the inflation worry is real? How do we know whether the experts will be right this time?
Jon Snow knows nothing.

The rest of us might know a thing or two.
Time is the ultimate currency.
J295
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Re: Does Anyone Knows Anything?

Post by J295 »

Socrates speaking about the Oracle:
“I am wiser than this man; it is likely that neither of us knows anything worthwhile, but he thinks he knows something when he does not, whereas when I do not know, neither do I think I know; so I am likely to be wiser than he to this small extent, that I do not think I know when I do not know”
squirm
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Re: Does Anyone Knows Anything?

Post by squirm »

KnowNth wrote: Fri Feb 09, 2018 4:27 pm I only started to read financial/investment news and analysis a couple years ago. But I have been deeply frustrated by what I read and what really happened. Looks like the experts have an explanation for everything, THEN reality hits. And experts quickly have a new theory for the new reality.

For example, for the last few months, there are numerous articles explaining WHY VIX is so low. One of the top google search result is still "3 Reasons The VIX Is Low And Why It May Stay That Way" from Forbes. We all know what happened last week.

Now, the talk of the town is "Inflation is coming back big time" and even bogleheads has more than the usual share of TIPS discussions. But how do we know the inflation worry is real? How do we know whether the experts will be right this time?
Don't listen to the clowns they don't know any more than the next clown. CNBC is the circus. I watch it, it's entertainment during my thirty minutes of winding down. You'll notice patterns after time. Short answer... They never admit they were wrong.
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just frank
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Re: Does Anyone Knows Anything?

Post by just frank »

I think Forbes knows nothing.
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bottlecap
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Re: Does Anyone Knows Anything?

Post by bottlecap »

The minute you realize that you know nothing, everyone else knows nothing, and, more importantly, even if someone knew something you can’t pick that person out in advance, be careful.

You are on the precipice of becoming a Boglehead.

JT
epictetus
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Re: Does Anyone Knows Anything?

Post by epictetus »

I read this somewhere, liked it, and thought it might fit in here:

When you get a Bachelor's degree you think you know everything.
When you get a Master's degree you realize you don't know anything but you think someone else does.
When you get a Doctoral degree you realize nobody knows anything.

Also I have read/heard an expert defined as "a repository of informed uncertainty."
Focus on what you can control
david
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Re: Does Anyone Knows Anything?

Post by david »

KnowNth wrote: Fri Feb 09, 2018 4:27 pm I only started to read financial/investment news and analysis a couple years ago. But I have been deeply frustrated by what I read and what really happened. Looks like the experts have an explanation for everything, THEN reality hits. And experts quickly have a new theory for the new reality.

For example, for the last few months, there are numerous articles explaining WHY VIX is so low. One of the top google search result is still "3 Reasons The VIX Is Low And Why It May Stay That Way" from Forbes. We all know what happened last week.

Now, the talk of the town is "Inflation is coming back big time" and even bogleheads has more than the usual share of TIPS discussions. But how do we know the inflation worry is real? How do we know whether the experts will be right this time?
Noone knows the unknown, at least in the aggregate. Experts generally have some ideas as to why some things occurred (past tense) because there are explanations for lots of things that are going on. But, I don't think any of it has predictive value. Otherwise those folks would be able to leverage that predictive knowledge to make a great deal of money and then when enough people know about it, the alpha that it would generate would be taken to basically zero.

We have a lot of macro-economic data that we can assign to things when they occur. My take is that it isn't worth terribly much if it has no predictive value. But that's what happens. An event occurs and an expert looks at economic data that seems anomalous or interesting and will then assign that as the reason. Conventional wisdom will spread that narrative widely. And now we "know" why an event occurred.

That's what I like about the Bogleheads philosophy. We can embrace not having an answer and just buy the overall market and hold for the long term.
david
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Re: Does Anyone Knows Anything?

Post by david »

epictetus wrote: Fri Feb 09, 2018 6:05 pm I read this somewhere, liked it, and thought it might fit in here:

When you get a Bachelor's degree you think you know everything.
When you get a Master's degree you realize you don't know anything but you think someone else does.
When you get a Doctoral degree you realize nobody knows anything.

Also I have read/heard an expert defined as "a repository of informed uncertainty."
And when you get on television, you know everything again.
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Tycoon
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Re: Does Anyone Knows Anything?

Post by Tycoon »

What does the evidence reveal?
Emotionless, prognostication free investing. Ignoring the noise and economists since 1979. Getting rich off of "smart people's" behavioral mistakes.
Shikoku
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Re: Does Anyone Knows Anything?

Post by Shikoku »

Image
"I don't worry too much about pointing fingers at the past. I operate on the theory that every saint has a past, every sinner has a future." -- Warren Buffett
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Taylor Larimore
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Jack Bogle's advice

Post by Taylor Larimore »

KnowNth wrote: Fri Feb 09, 2018 4:27 pm I only started to read financial/investment news and analysis a couple years ago. But I have been deeply frustrated by what I read and what really happened. Looks like the experts have an explanation for everything, THEN reality hits. And experts quickly have a new theory for the new reality.
KnowNth:

Our mentor, inventor of the index fund, has been around a long time. This is what John Bogle said in the linked video: "Nobody knows nothing."

https://www.youtube.com/watch?v=A0gQiz0pCyI

Jack's advice: Buy the market, then stay-the-course.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
alex_686
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Re: Does Anyone Knows Anything?

Post by alex_686 »

A book recommendation. Nate Silver's "The Signal and the Noise". Weathermen self calibrate their forecasts, stock analysis don't.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
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oldcomputerguy
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Re: Does Anyone Knows Anything?

Post by oldcomputerguy »

KnowNth wrote: Fri Feb 09, 2018 4:27 pm I only started to read financial/investment news and analysis a couple years ago. But I have been deeply frustrated by what I read and what really happened. Looks like the experts have an explanation for everything, THEN reality hits. And experts quickly have a new theory for the new reality.

For example, for the last few months, there are numerous articles explaining WHY VIX is so low. One of the top google search result is still "3 Reasons The VIX Is Low And Why It May Stay That Way" from Forbes. We all know what happened last week.

Now, the talk of the town is "Inflation is coming back big time" and even bogleheads has more than the usual share of TIPS discussions. But how do we know the inflation worry is real? How do we know whether the experts will be right this time?
Investment author Paul Merriman once categorized the sources of investment information available as coming from three sources: Wall Street, Main Street, and Academic Street. Wall Street has a vested interest in getting you to invest in high-cost products, such as front-end load funds and funds with large expense ratios; they do not have your interests at heart, they have a built-in conflict of interest. Main Street consists of your "buddy with a hot stock tip". They know even less than the Wall Street guys. Academic Street's information comes from impartial, non-biased sources. Academic Street isn't trying to get you to put your money in places that will benefit them, and they aren't bragging about their "hot stock tips".

Wall Street knows nothing (as you have seen). Main Street knows even less. Listen to the guys here.
There is only one success - to be able to spend your life in your own way. (Christopher Morley)
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Watty
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Re: Does Anyone Knows Anything?

Post by Watty »

KnowNth wrote: Fri Feb 09, 2018 4:27 pm How do we know whether the experts will be right this time?
The experts don't even agree but there are enough of them that at the end of the year a few of them will have turned out to be geniuses by making the correct predictions.

In some financial magazines there will even be contrary predictions in the same issue so that in a few months they can have a follow up story on the one that turns out to be right.
Last edited by Watty on Fri Feb 09, 2018 7:21 pm, edited 1 time in total.
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Watty
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Re: Does Anyone Knows Anything?

Post by Watty »

thangngo wrote: Fri Feb 09, 2018 4:56 pm The rest of us might know a thing or two.
But you have to know something that no one else knows or that knowledge will already be priced into the market.

Lot of people actually know lots of things, the problem is that too many people know the same things.
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Top99%
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Re: Does Anyone Knows Anything?

Post by Top99% »

I know that I know nothing so therefore I know everything. How is that for a wine-induced deep thought? :beer
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oragne lovre
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Re: Does Anyone Knows Anything?

Post by oragne lovre »

Of course I know one thing that I know nothing.
The finest, albeit the most difficult, of all human achievements is being reasonable.
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saltycaper
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Re: Does Anyone Knows Anything?

Post by saltycaper »

My phrasing must have tickled someone. Let me re-phrase. Aside from potential epistemological criticisms that are outside the scope of how the phrase is used on the forum, and even ignoring the unfortunate grammatical twist, the saying, "Nobody knows nothing," is demonstrably false. It is just a cute catch-phrase people like to use. The answer to the question, "Does anyone know anything?" is, yes, of course people know things under the limits of what it means to possess human knowledge.

The increasing breakeven rate between TIPS and nominal bonds is an indication of rising inflation expectations and a demand for a higher inflation risk premium, even though the difference is thought to include other varying factors. That does not mean the expectations will be realized nor does it mean the premium will be rewarded. That's because it should be obvious the truth is not, "Everyone knows everything," nor even, "Someone knows everything." But the truth also is certainly not, "Nobody knows nothing."
Quod vitae sectabor iter?
dbr
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Re: Does Anyone Knows Anything?

Post by dbr »

KnowNth wrote: Fri Feb 09, 2018 4:27 pm Looks like the experts have an explanation for everything, THEN reality hits. And experts quickly have a new theory for the new reality.
The people you are reading are not experts.

Also, "Nobody knows nothing" is silly.
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telemark
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Re: Does Anyone Knows Anything?

Post by telemark »

Someone, somewhere, probably does know something. How do we find that person? I don't know.
Chip
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Re: Does Anyone Knows Anything?

Post by Chip »

The way I heard/read the quote was "Nobody knows nothin' worth knowing".
eldinerocheapo
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Re: Does Anyone Knows Anything?

Post by eldinerocheapo »

The one person who brought the unknowable to me in an entertaining and informative style was Louis Rukeyser of Wall St. Week fame. He made the mystifying markets and uncertainty fascinating to me and he did it in a modest, non technical way. I devoured his newsletters that he sent out trying to get new subscribers.
He got me going on this and his philosophy dovetailed that of VG.

Here's to you, Uncle Lou!

:sharebeer
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MiddleOfTheRoad
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Re: Does Anyone Knows Anything?

Post by MiddleOfTheRoad »

In the information age, everybody knows everything. Therefore, nobody knows anything (different).
DrGoogle2017
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Re: Does Anyone Knows Anything?

Post by DrGoogle2017 »

I feel much calmer that I don't listen to CNBC on my vacation. I think it's like watching a movie, if you turn the sound off, it's not as scary. But the minute you have the sound on, it's much scarier. The yapping of these so called experts can be grating on your psych.
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DanMahowny
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Re: Does Anyone Know Anything?

Post by DanMahowny »

I see lots of guys in their late 60s and 70's on CNBC explaining what's happening and why.

"this indicator shows the market was going to decline"
"this indicator shows the market was going to go higher"

And if you listen carefully, you'll hear them make vague predictions that completely contradict each other.

I wonder, if these guys are so smart, why are the still working???
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finite_difference
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Re: Does Anyone Know Anything?

Post by finite_difference »

When the Internet was relatively young, we had a perfect term for an individual who was new and therefore didn’t know anything: they were a “newbie” or, more succinctly, a noob.

“I saw it on the Internet, so it must be true,” thinks the noob.

Of course, those of us who aren’t noobs know how to use the Internet to separate truth from fact (using Google-fu).

But I did not find this site through Google. And before finding Bogleheads I was definitely a financial noob. I am sure I tried but the signal was buried in the noise.

Try finding this site using “DuckDuckGo” without cheating, so using only general terms — I am guessing it’s not easily found.

There are things that are knowable and things that are not. The Boglehead philosophy is basically a way of applying the knowable to the unknowable.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
finite_difference
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Re: Does Anyone Knows Anything?

Post by finite_difference »

epictetus wrote: Fri Feb 09, 2018 6:05 pm I read this somewhere, liked it, and thought it might fit in here:

When you get a Bachelor's degree you think you know everything.
When you get a Master's degree you realize you don't know anything but you think someone else does.
When you get a Doctoral degree you realize nobody knows anything.

Also I have read/heard an expert defined as "a repository of informed uncertainty."
In my opinion it should be (difference is important):

* When you get a Bachelor's degree you think you know everything.
* When you get a Master's degree you realize you don't know everything but you think someone else does.
* When you get a Doctoral degree you realize that nobody knows everything, and what you know is nothing compared to what you don’t know.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
dodgy55
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Re: Does Anyone Know Anything?

Post by dodgy55 »

I would make a conservative guess that there are around 100,000 individuals in TV, radio and internet who are paid to write something about finances, stock, etc. a few times per week. Imagine having to sit a your computer and come up with a 1,000 word document two or three times a week that is not only informative, entertaining, and topical, but has an edge and shows you are above the crowd. Not easy to do. So I'd say most of the information you are getting from various sources reflects a need to get something written and out there. If they get it right, great for them. If they get it wrong, well there is always next time. Everybody is human.
Fond memories are the best investment
GoldenFinch
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Re: Does Anyone Knows Anything?

Post by GoldenFinch »

saltycaper wrote: Sat Feb 10, 2018 3:01 am My phrasing must have tickled someone. Let me re-phrase. Aside from potential epistemological criticisms that are outside the scope of how the phrase is used on the forum, and even ignoring the unfortunate grammatical twist, the saying, "Nobody knows nothing," is demonstrably false. It is just a cute catch-phrase people like to use. The answer to the question, "Does anyone know anything?" is, yes, of course people know things under the limits of what it means to possess human knowledge.

The increasing breakeven rate between TIPS and nominal bonds is an indication of rising inflation expectations and a demand for a higher inflation risk premium, even though the difference is thought to include other varying factors. That does not mean the expectations will be realized nor does it mean the premium will be rewarded. That's because it should be obvious the truth is not, "Everyone knows everything," nor even, "Someone knows everything." But the truth also is certainly not, "Nobody knows nothing."
I really hope people know things!

Isn’t it just a super clunky way of saying, “We don’t know for certain why the the market is doing what it’s doing or what direction it will go, we just have a theory or two?” “We don’t know and neither does anyone else, until maybe after the fact.”
2015
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Re: Does Anyone Knows Anything?

Post by 2015 »

squirm wrote: Fri Feb 09, 2018 5:19 pm
KnowNth wrote: Fri Feb 09, 2018 4:27 pm I only started to read financial/investment news and analysis a couple years ago. But I have been deeply frustrated by what I read and what really happened. Looks like the experts have an explanation for everything, THEN reality hits. And experts quickly have a new theory for the new reality.

For example, for the last few months, there are numerous articles explaining WHY VIX is so low. One of the top google search result is still "3 Reasons The VIX Is Low And Why It May Stay That Way" from Forbes. We all know what happened last week.

Now, the talk of the town is "Inflation is coming back big time" and even bogleheads has more than the usual share of TIPS discussions. But how do we know the inflation worry is real? How do we know whether the experts will be right this time?
Don't listen to the clowns they don't know any more than the next clown. CNBC is the circus. I watch it, it's entertainment during my thirty minutes of winding down. You'll notice patterns after time. Short answer... They never admit they were wrong.
Plus. Much.

Elephant in the room: this would apply to many posts in many threads in this forum, including the many containing major/minor behavioral finance violations. As I've posted many times, once you start reading outside the narrow fields of economics, investing, and personal finance, you notice a pattern of simplicity across a broad spectrum of fields that repeatedly contradicts the complexity you will often find here (a good starting point i Nassim Taleb).

A shortcut and antidote to all the noise here and elsewhere is to simply follow Taylor's posts.
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