Sublime Noise and the Goldman Op Ed

…noise is what makes our observations imperfect. – Fischer Black

News Flash: Bankers are pigs.

That’s a riot.

Here’s another one…. birds fly…

Yesterday’s NYT piece by Greg Smith drilling $GS is sublime noise.

It is sublime because it has the perfect combination of elements to catch the attention of the media and public and fuel endless debate and rehashing.

It is noise because there is no significant fundamental information in it and it only distracts rational investors from making good decisions.

$NYT only published it to capture your attention so they can sell advertising.

It reminds me a lot of the Bank of America controversy around debit card fees. Remember that one? Everyone was piling on $BAC. It is a bank we love to hate and jump on anything negative. This was seen as one more dumb decision by a bank responsible for the crisis and terribly out of touch with America.

Well, if you bought into the teeth of that sublime noise on $BAC, you are making 50% plus on your money in less than 6 months.

But my point here is not to buy $GS into the current noise festival. It is more this, if you are trading on the story, be aware that there are others out there who are trading off of information and not noise and likely they are eating your lunch.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

blog comments powered by Disqus
Phil Pearlman Blog