Re:Standard & Poor's gives Google the U.S. debt treatment
by Eliezer on Tuesday August 16, 2011 @11:27PM
(#2893954)
These price targets are ridiculous. If S&P actually knows where prices are going, why aren't they running the world's largest hedge fund?
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Re:Standard & Poor's gives Google the U.S. debt treatment
by ewanmcteagle on Tuesday August 16, 2011 @11:30PM
(#2893964)
You must ask this question of every single piece of stock advice ever given freely or sold. If you knew about future price movements with some degree of accuracy, the least profitable thing you could do would be to tell others.
Re:Standard & Poor's gives Google the U.S. debt treatment
by kurumo on Tuesday August 16, 2011 @11:41PM
(#2893987)
That is not entirely correct. If you have already acquired credibility (somehow, doesn't matter how for the purposes of this exercise), your estimate or advice can (and frequently does) become a self-fulfilling prophecy. Knowing that a significant number of investors will follow your advice gives you information which can be used in the market. It then stands to reason that the most profitable thing you could do would be to give this advice to the maximum possible number of people.
Re:Standard & Poor's gives Google the U.S. debt treatment
by extension on Tuesday August 16, 2011 @11:57PM
(#2894018)
No particular reason the advice has to be accurate.
Re:Standard & Poor's gives Google the U.S. debt treatment
by sliverstorm on Wednesday August 17, 2011 @12:23AM
(#2894083)
accurate advice is more likely to come true, thus bolstering your credibility.
Re:Standard & Poor's gives Google the U.S. debt treatment
by extension on Wednesday August 17, 2011 @12:48AM
(#2894145)
But the advice comes true because you gave it. This is the inherent flaw with the market at issue here -- it selects for consistency, but not accuracy per se.
Re:Standard & Poor's gives Google the U.S. debt treatment
by mkramlich on Tuesday August 16, 2011 @11:36PM
(#2893975)
I have a theory about how a lot of Wall Street secretly works: the best way to predict the future is to make it happen the way you want.
Re:Standard & Poor's gives Google the U.S. debt treatment
by JonnieCache on Wednesday August 17, 2011 @05:24AM
(#2894663)
I don't think that's much of a secret. It's written into the maths as far as I can see.
Re:Standard & Poor's gives Google the U.S. debt treatment
by baguasquirrel on Wednesday August 17, 2011 @11:44AM
(#2895713)
Well that's not much different from how we play right? Make the future happen, literally. But they ultimately have to face what we will face. The markets may not buy. All that real estate stock for example.
Re:Standard & Poor's gives Google the U.S. debt treatment
by Estragon on Wednesday August 17, 2011 @01:25AM
(#2894218)
I think these moves are S&P's aattempt to come back from the massive hit their credibility took from rating toxic MBS as AAA. They're trying to prove they still have some market utility by making some predictions.