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Fear not.
"Investors always have a plan until the market punches them in the face."
- Jason Zweig paraphrasing Mike Tyson
"Fear sells. Fear makes money. The countless companies and consultants in the business of protecting the fearful from whatever they may fear know it only too well. The more fear, the better the sales."
That short summary from
The Science of Fear
, by Dan Gardner, is perfect.
Investors have to face fear every day, although more so on some days than others (nobody complains about volatility to the upside), and don't often face it very effectively. To quote Jason Zweig paraphrasing Mike Tyson, "investors always have a plan until the market punches them in the face."
Now that downside volatility is back with a vengeance, market commentaries are full of fear stories, since markets are driven by narratives much more than they are driven by data.
As Morgan Housel has cautioned: "The business model of the majority of financial services companies relies on exploiting the fears, emotions, and lack of intelligence of customers. The worst part is that the majority of customers will never realize this."
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During witching hour, yen surge, algos set off 'flash-crash' moves in currency market
There were some odd movements in currency markets on Wednesday, with the yen jumping almost 8 percent against the Australian dollar and surging 10 percent versus the Turkish lira. The cause of the moves remains unclear, with everything from the Apple news to thin liquidity on a Japanese holiday to algorithmic trading all getting some of the blame. The rapid swing in the currency happened during what in known as the witching hour between the close in New York and the open in Tokyo. (Bloomberg Markets | Jan 3)
Market's favorite recession indicator lurches lower in new year
Traders return to their desks in the new year with a familiar warning signal flashing even more strongly than before - the Treasury yield curve got even flatter, feeding the market's worst suspicions about the U.S. economy. Market watchers noted a dramatic compression in what is arguably the most reliable indicator of recession - the gap between the 3-month and 10-year Treasury yields. (Bloomberg Markets | Dec 2)
Big tech may look troubled, but it's just getting started
Lawmakers across the political spectrum say Big Tech, for so long the exalted embodiment of American genius, has too much power. Once seen as a force for making our lives better and our brains smarter, tech is now accused of inflaming, radicalizing, dumbing down and squeezing the masses. Tech company stocks have been pummeled from their highs. Regulation looms. Even tech executives are calling for it. (The New York Times | Jan 1)
The Federal Reserve versus the markets: who has it wrong?
The message sent by investors in stormy financial markets is clear: the global economic expansion could be in trouble. But the Federal Reserve remains optimistic, publishing strong growth forecasts for the U.S. and plotting out more interest rate rises. So are investors right to be worried? (Financial Times | Dec 30)
U.S. stocks end worst year since financial crisis
Stocks around the world limped into the end of a dismal year that's seen bear markets in equities from Japan to Germany. Europe's main stock gauge fell 13 percent drop in the year - the biggest since 2008. The 10-year Treasury yield slid to 2.68 percent, the lowest since February. The dollar edged lower as a government shutdown continued, while the yen climbed to a four-month high. (Bloomberg Economics | Dec 30)
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Cybersecurity news every Friday
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In China's push for high-tech, hackers target cutting-edge U.S. firms
To understand China's espionage goals, U.S. officials say, just look at the ambitious aims the country set out in the plan Made in China 2025. By that date, China wants to be a world leader in artificial intelligence, computing power, military technology, as well as energy and transportation systems. And that's just a partial list.
Log out & sniff your own wires
Protecting an organization depends on deep knowledge and experience, but a security to-do list can go a long way toward locking things down.
Toxic data: How 'deepfakes' threaten cybersecurity
"Fake news" is one of the most widely used phrases of our times. Never has there been such focus on the importance of being able to trust and validate the authenticity of shared information. But its lesser-understood counterpart,
deepfake
, poses a much more insidious threat to the cybersecurity landscape - far more dangerous than a simple hack or data breach.
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Hand-curated, chosen with love
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The farm bill, hemp legalization and the status of CBD: An explainer
Typically, cannabis is not part of the conversation around farm subsidies, nutritional assistance, and crop insurance.
It's true that hemp policy in the United States has been drastically transformed by this new legislation. However, there remain some misconceptions about what, exactly, this policy change does.
5G is coming this year. Here's what you need to know.
In 2019, a big technology shift will finally begin. It's a once-in-a-decade upgrade to our wireless systems that will start reaching mobile phone users in a matter of months. But this is not just about faster smartphones. The transition to new fifth-generation cellular networks - 5G for short - will also affect many other kinds of devices, including industrial robots, security cameras, drones and cars that send traffic data to one another.
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