Grasping At Peanuts!

By: Ian Campbell | Tue, Aug 16, 2011
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Last week I read an article in The Fiscal Times titled 'U.S. Markets Buoyed by Encouraging Jobs Report' - reading time 4 minutes. The article appears to, in part, attribute the increase in the U.S. equity markets indexes on Thursday to the release of last week's U.S. Labor Department report. This report said that 395,000 people filed for initial unemployment claims in the previous week, 10,000 fewer than economists had expected. I can only shake my head in disbelief that someone thought that small, inconsequential, and 'subject to adjustment' number of 10,000 (or 2.4%) initial unemployment insurance claims below economists' estimates - which themselves can be argued to be nothing more than 'best guesses' - would cause the U.S. financial markets to materially change direction. To me this is akin to saying that a baseball player hit a home run because a peanut vendor fell and rolled with his peanuts down 20 stadium steps, when a bystander who watched him fall predicted the peanut vendor would roll down 21 steps!

Then last Friday, another peanut vendor at the next baseball game in the multi-game series fell down a different set of stadium steps. On that day, another article in The Fiscal Times reported 'US Stocks Rise After Strong Retail Sales Report' - reading time 3 minutes. This article suggested that "A strong report on retail sales in July sent U.S. stock index futures higher after a week of record-setting gains and losses". I find this type of reporting lacking, even if it is right which I seriously doubt. My reasons are:

Intuitively, I am becoming ever more convinced that the financial markets are increasingly trading markets, not investment markets where 'investment' means a long-term hold. I am also not sure that necessarily is a bad thing, given what I see as current high levels of uncertainty in the prospective world economic condition.

As for the two peanut vendors, they are home recovering from sever concussions while the 'band plays on' at the game.



Ian Campbell

Author: Ian Campbell

Ian R. Campbell, FCA, FCBV
Economic Straight Talk

Through the Economic Straight Talk Newsletter Ian R. Campbell shares his perspective on the world economy, the financial markets, and natural resources. A recognized business valuation authority, he founded Toronto based Campbell Valuation Partners (1976), Stock Research Portal (2007) a source of resource companies market data and analytic tools, and Economic Straight Talk (2012). The CICBV* annually funds business valuation research in his name**. Contact him at
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