A basic tenet of statistics is that correlation does not necessarily mean causation. When cyclone Larry hit Queensland some years ago and the banana crops was decimated, the price of bananas skyrocketed (a correlation with clear causation). Coincidentally the price of petrol did too, but they had nothing to do with each other. It's one of the basic traps to watch out for in economics, and in the stock-market too - attributing cause where none exists, or where the real causal factor is unknown, or a combination of factors is responsible - some known, some unknown. Sort of makes it fun, always guessing ...
GW
P.S. You were probably being tongue in cheek, but I thought I'd post this reminder because so often I see people stating that something or other 'caused' a SP movement, when really, nobody fully knows, unless it's pie-in-your-face obvious.
P.P.S. One of the best even books on this is Freakonomics: A Rogue Economist Explores the Hidden Side of Everything by economist Steven Levitt and journalist Stephen J. Dubner.
GXY Price at posting:
43.0¢ Sentiment: Buy Disclosure: Held
