“Erghhh…it’s fucking tiring losing money, thank God it’s Friday”
“Yeah, I’ve not heard about anyone that killed it this week”
This was the conversation I overheard heard between two colleagues as I was walking out of the office on Friday evening. Of course they were talking about this:
The ‘market’ was fully expecting Mario Draghi to deliver more than he did on Thursday. The markets disappointment led to the above significant strengthening of the Euro, the 4th largest one day move in the EURUSD ever seen.
Many of the market participants that I spoke to were expecting Señor Draghi to ‘do’ what was already priced in and then a little more…just to please the market. They wanted an expansion to the ECBs EUR60bn per month quantitative easing and didn’t get it.
Observing this action at close quarters it struck me how much emphasis in the investment world gets placed on expectations, rumour and second guessing instead of cold hard facts.
I guess the defence would be that efficient market theory prices in all of the facts so the only way to make money is to try to second guess and predict future facts. However this in itself makes the market less efficient again.
Amongst all of the doom and gloom at work I barely thought to check my equity portfolio. When I did there was nothing to cause concern. Thats the beauty about focussing on real economics (assets, cash flows and profits) as opposed to speculation and second guessing.
The other point to note here is that the guy who gave the quote above technically had it wrong:
“…it’s fucking tiring losing other peoples money”
…would have been a much more accurate statement about his week!
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