Is "hope" an actionable plan?

Headline on bubblevision’s site:

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Apparently “hope” is not actionable.

Unemployment claims came in “better than expected” and GDP growth came in “better than expected”. So the lemmings give back yesterday’s 500 point gain.

https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-fall-ahead-of-gdp-jobless-claims-micron-slides-on-earnings/?src=A00220

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Santa knows what I asked for.
He’s delivering Xmas wishes!

:christmas_tree:
:gift:
ralph

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A BIG FAT BOTTOM… to the stock market

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Thread is aging beautifully.

Is “hope” an actionable plan?

Probably yes, for short term trading. (Measured in minutes to hours.) That’s driven mostly by emotion, so following emotions makes sense.

For long term investing, no. That’s driven by the underlying business, and how well the business produces profits. Those have nothing to do with hope.

–Peter

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I guess just a bit of hope ends up in that mode of investing as well.

Most stock prices are based on future earnings - and those future earnings are based on a bunch of assumptions. Those assumptions, may never come to fruition - so I’d say there is some hope that the assumptions are accurate and manifest themselves in future earnings.

'38Packard
==> Assumptions about future earnings may just as well be thinly veiled Hopes - no?

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I suppose they can be. But they shouldn’t be. Longer term projections would be better if they are based on a careful analysis of the company, it’s historic performance, and a good look at management’s projections for the next couple of years.

Naturally, you can’t get too exact with proper projections, but some companies lend themselves to a pretty good confidence in a smallish range of possible outcomes. Other companies will have very little confidence in projecting their future performance. Those generally don’t make for good long term investments. Those would be the ones where hope is the major factor in future earnings. They would also be the ones I would only invest for the very short term, if it all.

–Peter

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BINGO!!! AKA Hope.

'38Packard

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C’mon. You were a business executive in an earlier life. Certainly you have made some projections during that time. Are telling me you passed off your “hope” as a sound business plan?

—Peter

I think he is trying to say ‘there is a smidgen of hope in most every decision’. We don’t live in a ‘perfect knowledge’ world. And we’re people! Once I ascend to the singularity I’ll let you know if it is the same there.

JimA

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Nope. Would not have passed muster with my boss. When making assurances to deliver major pieces of technology and business process changes, I always couched it with as many assumptions as possible.

I’ve been on both sides of projection - both include some form of hope.

Thanks!
'38Packard

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BINGO!!! AKA hope.

:grinning:

—Peter

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Let’s get back to where we were…

I think I’ve been all about hopes sir. I don’t think I ever said I didn’t always work from a hope that things would turn out how I “hoped” they would. I just acknowledged that there is an element of hope in reading projections of future earnings.

Obviously you have a problem with that. Whatever.
'38Packard

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I think it’s more a matter of terminology. What you seem to be calling hope, I would call uncertainty. And I would contrast that with something that is so uncertain as to make it indistinguishable from pure hope.

I hope the market will go up tomorrow. I can project that the market will be higher 5 years from today with perhaps 95% confidence. (Numbers just examples here.)

The first is basically pure hope. The second is the result of a concerted analysis with a central expectation and a confidence interval. The uncertainty isn’t really hope, it’s a recognition that the future is uncertain, but isn’t entirely unpredictable, either.

—Peter