FInancial TV and the Need for a Reason in Stock Market Moves

Was (un)fortunate to catch some babble on CNBC yesterday and couldn’t help but notice that commentators attempted to get the audience’s attention by appealing to the human need to find an answer for everything.

• Why was the market up?
• Why was the market down?
• Why is Apple up?
• Why is gold down?
• Why is Europe up?
• Why is Thailand down?

Day to day there doesn’t have to be a reason for every little gyration in the market. But if you really believed that, then you wouldn’t watch financial TV. But human beings do need to “know,” even if the reason is wrong. They need to know so much that they get drawn to the financial “pornography” that spews on financial network shows. We don’t seem to see real analysis too often – but that armchair answer for everything comes easily to satisfy our needs.

Next time you need to know why, consider that there may not be a real reason why. Know that markets are markets and that on days the market is up, buying demand outstripped selling supply – and vice versa. And if you can accept that, they you may have a chance of experiencing financial sanity.