Readings: Causality, Stock Tweets, Nutrition, etc.

Something did happen to me somewhere that robbed me of confidence and courage and left me with a fear of discovery and change and a positive dread of everything unknown that may occur.
Joseph Heller, Something Happened

Tzara: Causality is no longer fashionable owing to the war.
Carr: How illogical, since the war itself had causes. I forget what they were, but it was all in the papers at the time. Something about brave little Belgium, wasn't it?
Tzara: Was it? I thought it was Serbia…
Carr: Brave little Serbia…? No, I don't think so. The newspapers would never have risked calling the British public to arms without a proper regard for succinct alliteration.
Tom Stoppard, Travesties

I'm reasonably sure I have no idea why most things happen. I don't let that prevent me from doing things, of course, but as time goes by I mostly assume that I'm traveling in a bubble of useful and convenient coincidences and I hope that it doesn't end right away, or at least that I don't notice when it ends. This is why I'm terrified of words like "because": I have little idea why anything happens, even the things I think I know why they happened.

Financial markets are good teachers of this sort of thing. Having spent decades around markets, I learned that once I had a pretty good idea why a few things happened, that coincided neatly with my discovery that I had no idea why those things happened. This has been true across debt markets, equity markets, macroeconomics, microeconomics, and so on. (I have had a similar experience in healthcare, where my main discovery as I go ever-deeper is how little we know, how often what we think we know is wrong, how often medical reversals happen, and how often better tests lead to more incidentaloma-induced unnecessary treatments, not better solutions.)

I reached the point, not long ago, where, to a first approximation, I began assuming that everything causes everything. This helpful shorthand allows me to nod sagely any time, for example, some new food is shown to be carcinogenic, or some piece of news causes an obscure economic indicator to fluctuate. Everything causes everything, I unhelpfully remind me.
Like most people, however, I still get excited when I discover someone confidently making causal claims in domains that I think I once knew something about but discovered that I didn't. MAYBE THEY KNOW SOMETHING, I think. It's one of the reasons people watch financial television, read financial papers, subscribe to investment letters, and so on. They know that these people don't know -- hey, if they did, they'd be doing something else that paid better, amirite? -- but MAYBE THEY KNOW SOMETHING.

Way back in my equity analyst days was when I first ran into Barron's magazine. It was this weird newspaper-cum-magazine that littered the trading desk, and that I had never seen before. And it was full of people who knew things. There stock picks, economic forecasts, and roundtables of investor-y people making predictions in front of irreverent but respectful Barron's staffers. Sadly, I fairly quickly discovered that, while well-intentioned, these were not MAYBE THEY KNOW SOMETHING. Picks often went south, trends ended as they were written about, and so on.

To Barron's credit, this never really stopped their compulsive causality detection. They still do that sort of thing, as if nothing has changed, as if markets aren't quasi-efficient, etc. I was reminded of that this recently when I noticed the word "because" in a Barron's tweet, and got hives. And then in another Barron's tweet. And another. Data-happy fellow that I am -- the word "because" frightens me, as I said above -- so I wanted to know, What happened? How did Barron's become so sure of causality's arrow? Could we all benefit? MAYBE THEY KNOW SOMETHING.

Here is a scraped list of the last two dozen or so Barron's tweets containing the word "because" and the word "Dow", one of the favorite objects of their because-ing.
Sadly, while initially optimistic, my optimism was crushed. Judging by these tweets, everything causes the Dow to fluctuate: trade talks, raised hopes, dashed hopes, tariffs, speaking, not speaking, waiting, not waiting -- even threes, for reasons that I prefer not to know. I am back to EVERYTHING CAUSES EVERYTHING, but I reserve the right to now then guiltily think that MAYBE THEY KNOW SOMETHING. Sure, not these people, but maybe ... someone else.


Here are a few articles and papers worth reading:

Economics & Finance
Life Sciences