Comments on: Is the Stock Market Like a Tracking Poll in Politics? http://www.thesunsfinancialdiary.com/investing/stock-market-tracking-poll-politics/ Fri, 03 Feb 2012 17:42:24 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Jay Curriehttp://www.thesunsfinancialdiary.com/investing/stock-market-tracking-poll-politics/#comment-52724 Jay Currie Wed, 04 Mar 2009 20:01:35 +0000 http://www.thesunsfinancialdiary.com/?p=3757#comment-52724 It is not a bad analogy so long as you don't get bogged down in the details. A political tracking poll gives a snapshot of voter intentions with respect to a particular politician or group of politicians. The S&P can be looked at as providing a similar snapshot of the perceptions of the overall market by participants in that market.But I think, Sun, you point is well taken. An index is about all the stocks which make it up. The proper political analogy would be a tracking poll of voting intentions towards the US Congress rather than the President. It is not a bad analogy so long as you don’t get bogged down in the details. A political tracking poll gives a snapshot of voter intentions with respect to a particular politician or group of politicians. The S&P can be looked at as providing a similar snapshot of the perceptions of the overall market by participants in that market.

But I think, Sun, you point is well taken. An index is about all the stocks which make it up. The proper political analogy would be a tracking poll of voting intentions towards the US Congress rather than the President.

]]> By: Sunhttp://www.thesunsfinancialdiary.com/investing/stock-market-tracking-poll-politics/#comment-52721 Sun Wed, 04 Mar 2009 18:27:24 +0000 http://www.thesunsfinancialdiary.com/?p=3757#comment-52721 @Sean: That's clearly what he meant, however I still have a hard time find the similarity between the stock market and tracking poll. The stock market reflects sentiments of tens of thousands market participants, how they see the overall economy and earnings of particular companies. The political tracking poll, while also indicating opinions of a large number of people, can be changed by a single people, the politician. The politician that the poll tracks can adjust his/her strategies to shift public opinion (isn't it true politicians make changes on the fly once they notice a dip in the poll?), but in the stock market, investors can't really adjust their own strategies to change the market. Maybe their own balance sheet, but not the market. @Sean: That’s clearly what he meant, however I still have a hard time find the similarity between the stock market and tracking poll. The stock market reflects sentiments of tens of thousands market participants, how they see the overall economy and earnings of particular companies. The political tracking poll, while also indicating opinions of a large number of people, can be changed by a single people, the politician. The politician that the poll tracks can adjust his/her strategies to shift public opinion (isn’t it true politicians make changes on the fly once they notice a dip in the poll?), but in the stock market, investors can’t really adjust their own strategies to change the market. Maybe their own balance sheet, but not the market.

]]> By: Seanhttp://www.thesunsfinancialdiary.com/investing/stock-market-tracking-poll-politics/#comment-52717 Sean Wed, 04 Mar 2009 16:41:10 +0000 http://www.thesunsfinancialdiary.com/?p=3757#comment-52717 I think he meant more that they are similar in that you can't be reacting to the daily readings but need to look at their aggregate. If you start changing policy every time the tracking poll looks bad you'd never be able to accomplish anything. Although it's also a little to hard make that work since, you would have to combine about 20 years of data until it starts looking good. I think he meant more that they are similar in that you can’t be reacting to the daily readings but need to look at their aggregate. If you start changing policy every time the tracking poll looks bad you’d never be able to accomplish anything. Although it’s also a little to hard make that work since, you would have to combine about 20 years of data until it starts looking good.

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