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Wednesday, January 25, 2012

The word JUMP and stock market Achtung

Big Achtung. Big Warning. Alert! Reading so many news and stock market articles, daily reports, it seems the often quoted verb "jump" is truly misquoted and have an extremely powerful psychological influence, especially for those who are currently deep in the world of investing. Take this for instance:
In the first day of trading Thursday, Maxis shares jumped to 5.42 ringgit ($1.60), an 8.4% jump from the IPO's set price of 5 ringgit ($1.47) and toward the higher end of most analysts' expectations.
http://www.forbes.com/2009/11/19/ananda-krishnan-malaysia-maxis-ipo-markets-equities-shares-trading.html Yes the above example perhaps can warrant the word "jump". But did it just jumped out of a sudden? It was in a single day, meaning dozens of transaction. And the price kept increasing. Or adding. Or some word such as going up. First try to understand the basic physical movement. Think of your time as a child. When you were afraid of the action, but seemingly seems like a "new style of cool". You tried to launch your whole 10kg of your body with both feet. BOTH FEET?! What a feat! Oh no no. I can't only one leg up at a time. Cos jumping is truly a life changing movement. Several years into school, there are sports event. When finally you are able to jump, for some basketball shots, badminton smashes or similar acrobatic movement, a jump still took a significant toil on your body - your joints, muscle, a long stretch, a big reverse gravitational movement to move upwards. Bloomberg and the other news channel often over-use the word jump. BP shares jumped 0.4 percent to close at $22.20. What is the significant of it? Was the word jump really about the price jumping? No, it was down perhaps by over 50%, over $20 dollars over the past few days and months of their Gulf leakage crisis. So on and so forth. You can figure it out. So the next time, when you see the verb jump in any financial, investing, business context, re-evaluate the significance, what happened before.
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