How to objectively identify market data

The amount of information publicly accessible today is so large that it was completely different from 10 or 20 years ago. Content that was previously invisible is now free, easily accessible and rich: from financial and financial information to global current events, while hundreds of millions of people build their lives on social media.

But do we really know more about the data and information? Is this information before we are making the right decision? Or are we more likely to be influenced by false information? Financial writer Morgan Housel pointed out in his recent blog that at least the following things should be noted: don't predict the impossible.

"Infinite beginning"The Beginning of InfinityOne book reads: please pay attention to the difference between prediction and prophecy. The prophecy claims to know what is impossible. The most shocking example of the latter is forecasting stock prices over a precise period of time.

Stocks (or any investment) are valued by taking today's numbers and multiplying them by tomorrow's stories. These figures are easy to find, such as income, earnings or dividends. Then many people feel that they can make reasonable predictions about how these numbers will grow in the future. It seems easy.

But most of the time you have to multiply these numbers by a story-a story that is either optimistic or pessimistic, such as investors' preferences for current macro policies, or their intuitive sensitivity. or how persuasive the financial advisers they believe are. Then investors are willing to pay for these estimates as a percentage or multiple of how much they have to pay. And this percentage or multiple is impossible to know in advance, because most of the time it reflects the mood of people in the market at some point. Who has the ability to know how a group of strangers will feel in the market a year later? Maybe you don't even know how you're going to feel tonight.

This is why many people still lose money by using so-called inside information to trade. Even if you know what data will be released, you usually don't know how other investors will react.

Similarly, it sounds reasonable if we say "expect the stock market to return 16 per cent over the next 12 months". But if we say, "I think people's mood will improve by 10% in June next year," it sounds like. groundless statement. It is. But these two lines are actually talking about the same thing.