private_messaging comments on Rationality Quotes: February 2011 - Less Wrong

13 Post author: gwern 01 February 2011 05:46PM

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Comment author: benelliott 02 February 2011 09:05:24PM 47 points [-]

Day ends, market closes up or down, reporter looks for good or bad news respectively, and writes that the market was up on news of Intel's earnings, or down on fears of instability in the Middle East. Suppose we could somehow feed these reporters false information about market closes, but give them all the other news intact. Does anyone believe they would notice the anomaly, and not simply write that stocks were up (or down) on whatever good (or bad) news there was that day? That they would say, hey, wait a minute, how can stocks be up with all this unrest in the Middle East?

--Paul Graham

Comment author: private_messaging 28 August 2013 03:28:04PM *  3 points [-]

Well, the time Steve Ballmer announced he was to quit the Microsoft, Microsoft's stock jumped quite a bit, clearly because Ballmer quit, even though one could perhaps explain either a raise or a fall with Ballmer quitting. Expected square of a change was big from Ballmer quitting, that's for sure. Same goes for any dramatic news, such as the recent gas attack in Syria.

And yes, over the time one could tell that something is up if the stock market graph is uneventful while there's dramatic news.

Bottom line is, a causal link can exist and be inferred even when there is no correlation.

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