Navigating the Maze of Models

Once again, no one cares about the economic calendar. There are a few items with recent data – jobless claims, mortgage applications, and Michigan sentiment – but most reports are old news. Everyone is focused on the increase in coronavirus cases and deaths. There are plenty of predictions, each based on model from a reputable source. The variation is wide.

The question that needs an answer:

How can we navigate the maze of models?

Last Week Recap

In my last installment of WTWA, two weeks ago, I interrupted my vacation plans to provide some perspective on the need for clarity in determining what information was both relevant and important. Sadly, we have seen little of that. The headline-driven market gets plenty of fresh material every day. There is little information on how to figure out what current market prices reflect, but plenty of unsupported guesses about what will happen next.

The Story in One Chart

I always start my personal review of the week by looking at a great chart. This week I am featuring Jill Mislinski’s version, an excellent combination of key variables.

The market lost 2.0% on the week, erasing the early end-of quarter gains. The trading range was 7.9% — very high and generally unpredictable. You can monitor volatility, implied volatility, and historical comparisons in my weekly Indicator Snapshot in the Quant Corner below.

Personal Note

Allocating my time during my semi-retirement (!?) is a challenge. I want to focus my time on the most important information for the individual investor. A challenge is that the most popular investment sources are not very good at figuring out what is important. They want to run eye-catching stories. They want to provide investment advice on specific stocks. Those are not the most helpful themes at this juncture.

How can investment writers and publishers do more? How about stories like honing investment skill and critical thinking. There is no other way to interpret today’s investment news. Finding the right sources to improve your knowledge would also be helpful.

These are not topics of great interest since most want shortcuts to success, not knowledge. It is a personal frustration since the bias against investment education limits my “reach.” The best I can do is to write what I think is important and publish it on my own blog. My first installment using this approach applied critical thinking to the seriously flawed analysis of a big-time interviewee on CNBC. I am trying to craft a good approach for such pieces, so I am especially eager to get comments and suggestions.


These are the states that have issued “stay at home” orders. (Statista)