Comments Heard on CNBC

To see and hear examples of feigned hypotheses regarding investing, one need only watch CNBC for fifteen minutes where the guru du jour will share his "insights" as to why the market (or a particular stock) is "going up" or "going down". Of course, there will usually be another guru to take the opposite position which keeps us entertained, but certainly not informed. A valid hypothesis can be subjected to statistical testing which will either disprove it or allow it to survive falsification until another hypothesis is formulated that better explains our observations of the data.

Newton himself had an almost prophetic insight into the field of behavioral finance centuries before its inception when humorously remarked, "I can calculate the motion of heavenly bodies, but not the madness of people."2 This quote also reminds us of the very important distinction that while physical systems have laws that remain constant, thereby yielding predictability, markets and economies are not physical systems. Their outcomes are heavily dependent on human behaviors which have no governing equations.

• Analysts' opinions about stocks
  • Extremly Neutral
  • Aggressive Hold
  • When a stock falls: "it's consolidating at a lower level."
  • Aggressively unchanged
  • My opinion is mixed
  • I never make any predictions...especially about the future. (Analyst will make stock recommendations but no opinion about where they are headed)
       Remember, before decimalization, stocks were traded in fractions.
  • The stock is going to a hat size. (opinion that a stock trading at 12 was going down. Hat sizes are measured in inches, for example: 7¼)
  • There's not many teenths (sixteenths) left in that one.
  
  
• Comments about the market
  • Q. Will the market come back. A. Chances are slim to anorexic.
  • The situation is murky
  • The market is falling its way back to respectability
  • The market has bad breadth
  • I'm getting out of present commitments (analysts try desperately to avoid saying "sell")
  • The market is going through an agonizing reappraisal of the situation.
  • If we lose all our gains today, we could go negative.
  
  
• Commentator Comments
  • They're melting down their Nobel Prizes to meet their margin calls. (Joe Kernen, regarding the famous collapse of Long Term Capital Management)
  • You've got to wait to see if the dogs will eat the dog food. (Art Cashin regarding the recovery of stocks after a stimulus)
  • It's trading at 3/64^ths. I don't know much about math, but I do know that if you bought it at 20, that's bad, (Joe Kernen regarding the price of a Canadian gold stock)