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April 21, 2008

Stock Market Noise Abatement Act

The trouble with oil/dollar/etc. records is that once you're at a record the odds are awfully good you'll set another record. After all, if we assume that prices generally follow a random walk, the odds are darn close to 50% that on the day after a record high that we set another record high. And that leads to a non-stop series of noisy headlines, "New record XXXX price set!"

I think we should institute a new rule: No talking about a record price until at least 40 hours day after a record has been set. Call it a kind of market noise abatement act.

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