Big Data
Equities start the day lower because the AFC team won the Super bowl. Actually stop, the Super bowl indicator is dumb and if you use it around me I’m blocking your email. Since nothing happened over night allow me to go on a rant about “big data”. Look, there’s a lot of variables in life and we humans are subject to the whims of fate on a minute by minute basis. In recent years all sorts of people like Nate Silver and professors at really expensive schools and Vox.com (to name a few) have done their best to build models that try and predict outcomes on a probabilistic basis. They write long fancy articles based on regressions and give us the “odds of X to happen” but you know what? They can be wrong and often are. Brexit was a longshot, Trump was a longshot, the Patriots to start the second half were a long shot. In fact I was told that the Falcons had a “99% chance to win” somewhere in the middle of the 3rd. ENOUGH. ENOUGH ALREADY. NO MORE. Stop telling me that something has an XYZ% chance to happen and expect me to take that as valuable data. Elections, Sporting Events, Markets, heck even LIFE doesn’t follow a bell curve, the “odds of something happening” can change in a microsecond so can we stop pretending that mathematical models are the holy grail in a sea of uncertainty? If I built a model that tried to predict where the S&P500 would be in the next twelve months based on a regression of 74 variables would you invest your money on it? Of course not, in the end it’s just a really fancy guess. So from this day forward I want you to remember that super complex models of the world whether they be focused on elections or sporting events or markets are still, even though they sound smart, just guesses, nothing more. By the way, what was up with the Avocado commercial? Are we not eating enough avocados in the US because I’m certainly doing my part. Do I need to start double dipping to help out?
After the open we got a thoroughly boring first half which, much like last night’s first two quarters, nearly put everyone to sleep. Should the day after the Super Bowl be a national holiday? I’m torn on this, on the one hand I’d love another day off but I’m not sure any country gives its citizens a free day based on an athletic event. To be honest I’d rather have St Paddy’s Day off and I’m not even Irish. No economic data to speak of and only 10 companies reported so let’s see what we can find in this dumpster. HAS was one of the big winners, up 14%, after sales of their board games wowed the world. How did I not see this one coming, the first time I played “Pie Face” I could’ve written an entire recap on it. Total home run. That and they make Disney Princess toys now and anyone with a daughter knows where I’m going here. A doll that’s impossible to take out of the package and comes with 14 items the size of a staple that I’ll eventually step on? Get out. Other winners were COG, MNK, FAST, TDB, and HBI. Losers were LH, NWL, XYL, TSN, and IP. By lunch a small selloff had us sitting at 2,291, down 0.3%. Guess what, we closed at 2,297 on Friday, 6 pts isn’t a “selloff” it’s noise.
We caught a small rally in the afternoon and when the bell rang we settled on 2,292, down 4 whole S&P points. Blah, another forgettable Monday mired in a very tiny range. Instead of opining about the fact that the market doesn’t move anymore let’s finish up with a sports thought. How lucky are we to be alive right now? In fact how lucky are you if your age is 30+? You got to see the greatest basketball player ever, you got to see the greatest hockey player ever, you got to see the greatest QB ever, you got to see the greatest NFL coach ever, and you got to see the 2nd greatest golfer ever (come at me). These have been salad days for sports fans, count your blessings because life has treated you kindly. By the way, I told you last Monday the Pats would win. Boooom! Final Score: Dow -9bps, S&P500 -21bps, Nasdaq -6bps, Rus2k -81bps.
Volume was below avg. Our desk was better to buy. Buying in Retail, Industrials, and REITs. Selling in Solar and Drugs. Shorting in Media. News Highlights:
- Succinct Summation of the Day’s Events: Super Bowl hangover. No news, light earnings, so we drifted away from all time highs. Forgettable Monday.
- The Zen of Phil Knight. Nice summary here: I’d been unable to sell encyclopedias, and I’d despised it to boot. I’d been slightly better at selling mutual funds, but I’d felt dead inside. So why was selling shoes so different? Because, I realized, it wasn’t selling. I believed in running. I believed that if people got out and ran a few miles every day, the world would be a better place, and I believed these shoes were better to run in. People, sensing my belief, wanted some of that belief for themselves. Belief, I decided. Belief is irresistible.
- Might be time to adjust those MCD models my friends
- 14 stocks! 14 stocks created 20% of the stock market gains since 1924. Think about that the next time you sell a great American icon because it “missed earnings”
- Quiet…so so quiet: “The S&P 500 hasn’t experienced a daily trading range of 1% or greater for 34 consecutive trading sessions, the longest streak since 1995, according to the Journal’s Market Data Group.
- By the way, lest you didn’t notice, it’s not just the U.S. doing well right now: Global growth near two-year high at start of 2017
- You know what, this is awesome. You win this one Tom
- How would you like to bike that path?
- They have more than just good port!
- Do me a favor, read this article just for the final sentence. Baird is already onboard with that notion! The most progressive bosses today—the ones whose behaviour will be tomorrow’s status quo—are demanding without being discouraging, honest without being rude and confident without being cocky.
- This is, by far, the coolest space gif I’ve ever seen
My analysis shows this guy a 9% chance of hitting this shot. Time to make plans for when he misses…
https://www.youtube.com/watch?v=2pqhnLMC1DI&feature=youtu.be
Have a good night.