{"id":540,"date":"2016-05-03T11:49:23","date_gmt":"2016-05-03T18:49:23","guid":{"rendered":"https:\/\/chaltenadvisors.com\/blog\/?p=540"},"modified":"2016-05-03T11:49:23","modified_gmt":"2016-05-03T18:49:23","slug":"data-point-interesting-or-ridiculous","status":"publish","type":"post","link":"https:\/\/chaltenadvisors.ca\/blog\/data-point-interesting-or-ridiculous\/","title":{"rendered":"Data point: interesting or ridiculous?"},"content":{"rendered":"

Every now and then a data point comes along that makes you sit back think, “hmm, that is interesting.” \u00a0– Not interesting in that it forms the\u00a0basis of a tactical investment move but interesting in that it helps us better understand the environment in which we invest. \u00a0For example,\u00a0Josh Brown, the Reformed Broker<\/a>, \u00a0highlighted this week that the ETF with the highest investor inflows year to date is\u00a0now the MSCI USA Minimum Volatility ETF. \u00a0It just stole the lead from the SPDR Gold Trust. \u00a0This tells you something interesting about investor sentiment and behaviour. \u00a0Investors likely ran for the supposed protection of gold when the markets bottomed mid-February, driving the popularity of the Gold ETF. \u00a0Now that stocks have come racing back, investors are moving back into equities but not whole-heartedly as they’re trying to protect themselves by only investing in stocks that have historically been less volatile than the market as a whole. \u00a0This represents a fairly typical pattern of investor behaviour – chase performance, sell risk at the bottom, chase performance, buy risk at the top. \u00a0It’s also indicative of the behavioural bias that people have where they always feel they have to do something in response to market moves. \u00a0Better to just stick with a disciplined plan and execute that plan irrespective of others’ fear or euphoria. \u00a0Nonetheless, we can still sit back while we execute and say, “that’s interesting!”<\/p>\n

On the other other hand, every now and then, actually much more often than that, a data point comes along\u00a0that leaves us scratching our head saying, “wow, either these people are just so much smarter than we are or this is just too ridiculous to think about.” \u00a0Mid-April, the Price Action Lab Blog<\/a> highlighted that on April 15 the S&P 500 index had reached a very important milestone – it had just reached the second longest period in the last 66 years without achieving a 6-day winning streak.” \u00a066 years! \u00a0Second long period ever! \u00a0A 3 standard deviation event? Surely something is awry! \u00a0Not likely. \u00a0I guess the chart below from the piece is supposed to suggest that these periods without a 6 day winning streak happen right before a large market move up.<\/p>\n

\"6<\/p>\n

I wonder how long it’s been since we’ve had a 7-day streak? \u00a0This is pure data mining and\u00a0not particularly interesting or helpful. \u00a0It does nothing to enhance our understanding of\u00a0the environment in which we invest. \u00a0And, disappointing those who seek the wisdom of the\u00a0technical crystal ball, the market is now at the exact\u00a0level it was on April 15.<\/p>\n","protected":false},"excerpt":{"rendered":"

Every now and then a data point comes along that makes you sit back think, “hmm, that is interesting.” \u00a0– Not interesting in that it forms the\u00a0basis of a tactical investment move but interesting in that it helps us better understand the environment in which we invest. \u00a0For example,\u00a0Josh Brown, the Reformed Broker, \u00a0highlighted this […]<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10,7,12],"tags":[],"class_list":["post-540","post","type-post","status-publish","format-standard","hentry","category-evidence-based-approach","category-graham-bodel-posts","category-passive-vs-active-investing"],"_links":{"self":[{"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/posts\/540","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/comments?post=540"}],"version-history":[{"count":3,"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/posts\/540\/revisions"}],"predecessor-version":[{"id":544,"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/posts\/540\/revisions\/544"}],"wp:attachment":[{"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/media?parent=540"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/categories?post=540"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/tags?post=540"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}