I saw an interesting exchange the other day on CNBC. Dylan Ratigan was cross-examining some poor analyst or CEO in connection with avian flu worries and pharma or food stocks. I really don't recall which it was.
What I do recall, however, was Ratigan's comment that flustered his poor guest. It was something very close to this, "....c'mon, the stock moved 6% in one day! Stocks don't usually do that!...what's going on there?"
Well, actually, yes, I think they do "do that," Dylan. Maybe you need to watch individual stock volatilities more often, to stay in touch with how wild the equity markets have become lately.
For example, I have a portfolio of twenty-one equities. Looking at yesterday's results, one rose over 4%, and another over 5%. Neither had particularly significant news that day. Another stock was within a hair of a 4% gain.
I've seen 6% daily moves, too. Recently. Especially with the large market moves of the past few weeks. I don't keep daily change records, but my point is this. Daily price volatility can actually be pretty large now. Remember Microsoft's loss of 11% of its value in just one day, for reporting higher-than-expected expenses?
I find it rather ironic that an anchor for a business entertainment network, CNBC, which stressed daily reporting, if not hourly reporting, would be so insensitive to the realities of daily stock price volatility in this environment.
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