Using Data To Change Behaviour.

One of the factors that matters in the stock market is the data. There is lots of it, from minute to minute trades, to twenty-year outcomes, to forever outcomes. The analysis is profound. Alpha, Beta, Sharp ratio, indexes, ETF, and a hundred more.

Why do we really care about it?

Because it gives us the illusion of control or predictability. Those illusions keep us sane in troubling times. That alone is a valuable asset.

Like with the Coronavirus. 

In the beginning, the data was near impossible to use. There was too little of it and the collection methods and publishing were iffy at best. Eventually, though the facts that matter are being teased out of the material.

You will recall the process is Data => Information => Knowledge => Action. We are partway up the information hurdle. The condition to date is known as the fog of war and decisions made with incomplete information can be very wrong. As the fog lifts, we will be better for it.

Yesterday I came upon these three links and they may help to give you some insight. You may need to register with to see all three.

  1. The first is short and from The Atlantic on 4 March. The official numbers are wrong and everyone knows it. That’s the idea of the fog of war.
  2. The second is long, from the Atlantic, too. 19th of March, The Hammer and the dance  The idea here is to use the date we have and see what we can learn from applying it. We can readily see, the current methods in use here, with testing and tracking added seem to make a big difference. It is interesting to note the author is a story-teller, not an expert. That is important to convey information in ways we can use. And usage matters. You can see his skill here.
  3. The third is a model builder. Models are for insight, they do not produce facts. You can play with the variables and discover that poor choices can make for big problems and strong choices can create a workable outcome. Be cautious of what you believe from using it. Epidemic Calculator.  This will likely change as more data becomes available from Europe and North America.

Where it leads

There is no right answer yet, but the delay tactic seems to be most promising. Time for treatment and better prevention. Maybe a vaccine.

This is the time for each of us to behave responsibly.  Keeping up with the information and its implications may help you be more comfortable with what you should do.

At least you will have a reason for some of the steps you should take.

I help people understand and manage risk and other financial issues. To help them achieve and exceed their goals, I use tax efficiencies and design advantages. The result: more security, more efficient income, larger and more liquid estates.

Please be in touch if I can help you. 705-927-4770

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