"Stocks eked out a slight gain as investors weighed earnings from some high-profile retailers against signs of rising input costs and continued dissatisfaction over efforts to find a solution to Europe's debt woes.
The Dow Jones Industrial Average inched up 4.28 points, or 0.04%, at 11410.21, after gaining 124 points early in the session."
So began this article ("Earners Help Dow Inch Higher") in today's newspaper describing yesterday's action on Wall Street.
Following on the heels of last week, in which the stock market crashed down more than 500 points in a single day only to soar back 400 the next–for seemingly no reason, does it really make sense to think that anyone has a logical explanation for why the stock market fluctuated a mere .04%? To put this in perspective last week's wild gyrations were 100 times larger!
As human beings we love to explain things and we love to think that everything has a rational cause-and-effect but, as numerous writers have eloquently explained in books such as Fooled by Randomness; The Hidden Role of Chance in Life and Markets and A Drunkard's Walk: How Randomness Rules Our Lives–randomness plays a far larger role in our lives than most of us care to admit.
One good way to begin acknowledging this randomness (and unlearning your need to explain away everything) is to simply respond to many questions by saying, "I don't know."
Put another way, a more honest lead into today's Wall Street Journal article (perhaps entitled "Dow Inches Higher for Unknowable Reasons") might have read, "The Dow Jones Industrial Average inched up 4.28 points, or 0.04%, at 11410.21, after gaining 124 points early in the session, as a result of millions of individuals, corporations and institutions making decisions for a variety of unknown reasons."
Not a fun or particularly enlightening read, but probably a little closer to the truth.
