The obsession with the ticker tape
by Vivek Kaul/DNA Money
There is nothing like the ticker tape except a woman - nothing that promises, hour after hour, day after day, such sudden developments; nothing that disappoints so often or occasionally fulfils with such unbelievable, passionate magnificence. — Walter Gutman
Virendra Sehwag was tearing the famed Pakistani bowling line up apart and sitting in office, Kunal Bajpai, was just not able to concentrate on his work.
And if Sehwag’s pyrotechnics were not enough, the price of Bajpai’s favourite stock had been falling since the morning. Every few minutes his eyes went to the ticker tape running at the bottom of his computer screen to check out the price of his favourite stock.
Ticker tape, he thought, was such a brilliant invention. It helped him being clued to the market every minute, if he wanted to.
A tick is the movement of the stock price in any direction, up or down. A ticker tape essentially records this movement and displays the stock price at a given point of time. These days such ticker tapes keep running at the bottom or top of television channels, websites, financial wires etc.
The first ticker tape was developed way back in 1867 and since then ticker tapes have made great progress. Thought it wasn’t till 1996 that a real time electronic ticker was developed and launched.
The ticker tape is just a symbol of the excess information related to business that is available these days. Be it business newspapers, business magazines, websites, analyst reports, blogs etc, anybody who goes looking for some information related to business, should be ready to be bombarded with it.
There is an entire industry that has sprung up and whose only job is to make sense of all the financial and business data that is being generated. Analysts, market commentators, television shows hosts have an explanation for every rally, every sell off and everything else that happens in between.
And that does not mean that a particular rally or a particular sell off happened because of the explanation being offered. What is surprising at times is that business television show hosts start analysing and giving reasons for a particular event, as soon as the information comes in. Don’t they need time to think?
As John Allen Paulos points out in his book, A Mathematician Plays the Stock Market “Because so much information is available - business pages, companies’ annual reports, earnings expectations, alleged scandals, online sites, and commentary - something insightful sounding can always be said.”
Further in their zeal to get the news and analysis to the audience before anyone else does, business media these days at times ends up oversimplifying things. Also at times they end up magnifying the effect of stockmarket movements.
As Nassim Nicholas Taleb points out in his book. Fooled By Randomness, “The market movements in the eighteen months after September 11, 2001, were far smaller than the ones that we faced in the eighteen months prior - but somehow in the mind of investors they were very volatile.
The discussions in the media of the “terrorist threats” magnified the effect of these market moves in the people’s heads. This is one of the many reasons that journalism may be the greatest plague we face today - as the world becomes more and more complicated and our minds are trained for more and more simplification.”
Another sad phenomenon of this spurt in information is that not all of it is correct. Recently the Securities and Exchange Board of India banned an analyst who used to appear on various business channels give a buy recommendation to some stocks and then go ahead and sell them himself.
Further, message boards of various business websites have been used by various unscrupulous operators in the past to generate a buzz around a worthless stock. The idea obviously is to take advantage of the unwary investor.
As Paulos rightly says in his book “Data, data everywhere, but not a thought to think”. Too much of anything is not necessarily good.
(The example is hypothetical)
