Correlation ≠ Causation for Fair-weather Fandom When Assessing Market Performance With Limited Sample Size and Without Historical Context

1. Correlation ≠ Causation for Fair-weather Fandom When Assessing Market Performance With Limited Sample Size and Without Historical Context | Charles W. Kinslow IV J.D., C.P.A. | LinkedIn
https://www.linkedin.com/pulse/correlation-causation-fair-weather-fandom-when-market-charles-w-?trk=prof-post[1/15/2016 8:43:30 AM]
Correlation ≠ Causation for Fair-weather Fandom When
Assessing Market Performance With Limited Sample Size
and Without Historical Context
Jan 14, 2016 13 views 1 Like 0 Comments   
Charles W. Kinslow IV J.D., C.P.A.
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2. Correlation ≠ Causation for Fair-weather Fandom When Assessing Market Performance With Limited Sample Size and Without Historical Context | Charles W. Kinslow IV J.D., C.P.A. | LinkedIn
https://www.linkedin.com/pulse/correlation-causation-fair-weather-fandom-when-market-charles-w-?trk=prof-post[1/15/2016 8:43:30 AM]
So, 2016 has arrived...or rather, did roughly two weeks ago...and the markets have
already broken their new years' resolution to lessen scare tactics designed to
perpetuate investor hysteria in concert with the ceaselessly pessimistic media. In
prior posts covering market performance, I have emphasized context as the
operative word to keep in mind when measuring the impact of price drops. Okay,
yes. I can see how certain persons would experience elevated blood pressure over
the percentage drops in the markets over the last two weeks. However, that
perception is the result of catastrophizing borne from viewing economic events in
a vacuum. I suggest you drop the latest Tony Robinson self-help book and review
market performance in prior recessionary periods to uplift your spirits.
Another operative word to commit to memory is uncertainty. Despite the wealth
of economic principles, philosophies, hypotheses, theorems...sorry...there is still
a material element of uncertainty among the most experienced economists in
terms of how the various factors with market influence interact and the
subsequent behavior stemming from those interactions. If you're an avid reader
of news media, a simple mental exercise calling up the presence of this
uncertainty may help stem a panic attack. Or, as lack of certainty can cause
anxiety in many individuals regardless of subject matter, it could be an absolutely
terrible idea. Note the disclaimer at the bottom disavowing any pretense of
medical knowledge and consequently liability for following any advice herein.
Also, don't discount the past resiliency demonstrated by markets exhibiting rapid
recoveries from stagnant performance.

3. Correlation ≠ Causation for Fair-weather Fandom When Assessing Market Performance With Limited Sample Size and Without Historical Context | Charles W. Kinslow IV J.D., C.P.A. | LinkedIn
https://www.linkedin.com/pulse/correlation-causation-fair-weather-fandom-when-market-charles-w-?trk=prof-post[1/15/2016 8:43:30 AM]
Written by
Charles W. Kinslow IV J.D., C.P.A.
For the perpetual pessimists, consider the implication of currently under-
performing markets. After all, as time has demonstrated, a recovery is inevitable,
suggesting the potential for increased returns in subsequent periods. If you're a
sports fan, and follow teams that never, ever seem to stop winning (Crimson
Tide), consider the fact that even the seemingly invincible stocks have hit lows
during past years. Therefore, if you happen to be a loyal fan of a team that
doesn't lull the masses with redundant athletic supremacy you can find a
measure of comfort from the fact that even the high and mighty are susceptible
to periodic performance declines. On a final, more technical note, if stock prices
continue to fall, consider the simple investment mantra imprinted on a magnet I
saw somewhere: "Buy low, Sell high."
Disclaimer: I am not a licensed physician, and, as such, any representations made
herein as to physical or psychological ailments are intended for entertainment
purposes only.
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4. Correlation ≠ Causation for Fair-weather Fandom When Assessing Market Performance With Limited Sample Size and Without Historical Context | Charles W. Kinslow IV J.D., C.P.A. | LinkedIn
https://www.linkedin.com/pulse/correlation-causation-fair-weather-fandom-when-market-charles-w-?trk=prof-post[1/15/2016 8:43:30 AM]
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