What we’re reading (7/19)

• “Earnings And Fiscal Debate Could Be Catalysts For Stocks In The Week Ahead” (CNBC). Earnings season is in full swing and Congress will be mulling over a potential new trillion-dollar stimulus.

• “Academic Project Used Marketing Data To Monitor Russian Military Sites” (Wall Street Journal). In a neat experiment, researchers at Mississippi State University were able to use commercially available cellphone data to track the whereabouts of Russian officials after they visited a sensitive missile test site in August 2019. Similar data have been used to reveal the locations of sensitive U.S. forward operating military bases.

• “Is The ‘Great Rotation’ In The Stock Market Under Way As Coronavirus Cases Surge? Or Is It A False Dawn? Here’s What Experts Think” (MarketWatch). “Value”-styled strategies seems to be beating “growth”-oriented strategies once again.

• “Fixing The World’s Most Inefficient Market” (Forbes). “Unlike financial markets, which exchange billions of dollars daily, the labor market is rife with human error, inefficiency, and devoid of the sort of transparency and common language that efficient markets require.”

• “What Risk Isn’t” (Of Dollars And Data). In finance, “risk” is taken to mean the standard deviation of returns—that is, the average deviation (up or down from the mean, or average, return). Moreover, risk is generally assumed to be undesirable. As many have pointed out, however, it’s kind of silly to treat above-average returns as undesirable. The author here draws a line between volatility and risk and argues, a la Rumsfeld, that volatility is a known unknown, while risk is an unknown unknown. It might all be semantics though: if returns are normally distributed, above-average returns don’t manifest in isolation; rather, they can only exist in the presence of other periods of below-average returns that are equal in magnitude.