Correlation, Not Causation

Threats of nuclear war, racial, social, political unrest; a world deeply divided in so many ways…yet the stock market is at an all-time high. How?

Today, a red car speeds Southbound down I-75 in the right lane, and my left shoe is untied at the very same moment. These two events are correlated, in that they’re happening at the same time. In other words, there is a high correlation between speeding red cars and Adam’s left shoelace. But did one cause the other? Did the red car cause my shoe to become untied? Of course not.

There is so much chatter about the stock market signaling the support of any one person’s actions – or inactions – that I fear we’re missing a basic tenet of logic: just because two events are occurring at the same time does not mean they’re fully and directly related; one is not necessarily the cause of the other.

Please continue to practice caution in critical thinking. For example, if you ask me what the market is going to do in the next six months, and I confidently respond with an answer that contains the word ‘because’ then you may want to walk, if not run away. The world is way too nuanced and unpredictable for any of us to predict the next move or the next event. To try to do so is logical folly.

Instead, let us maintain a rational and long-term perspective. The news stories of today will come and go, but the basic needs of human connection and service to one another will win the long game. Invest in that, not the noise.