From a Cato Institute article by Steve Hanke1 (emphasis added):

Most press reports about Zimbabwe’s fantastic hyperinflation are off the mark – way off the mark. Even our most trusted news sources fail to get the facts right. This confirms the “95 Percent Rule”: 95 percent of what you read in the financial press is either wrong or irrelevant.

Is the 95 percent rule accurate? In other words, is "95 percent of what you read in the financial press is either wrong or irrelevant?"

Note: Steve Hanke certainly seems to believe that inflation for some countries is higher than actually reported (e.g. the Zimbabwe article I cited, this tweet regarding Sudan from 9 hours ago, and this tweet regarding Argentina from 11 hours ago). This may or may not influence his opinions about the financial press. This question has nothing to do with whether inflation (or hyperinflation) is incorrectly reported.

1Professor of Applied Economics and Co-Director of the Institute for Applied Economics, Global Health, and the Study of Business Enterprise at The Johns Hopkins University in Baltimore

But this belongs on Skeptics! No, it doesn't.

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    @BarryHarrison So Sturgeon's law also applied to your search results? :)
    – nanoman
    May 13, 2019 at 7:09
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    @nanoman Very nice! Great joke! May 13, 2019 at 7:14
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    That's true of any news. The currency of news is speed, not accuracy. May 13, 2019 at 16:16
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    "95% of all statistics are made up by the authors of the item you are reading." I leave it as an exercise for the reader to determine whether this item is one of the exceptions to the rule quoted above. May 14, 2019 at 2:52

3 Answers 3


If this is understood as "irrelevant to investment decisions", then it is plausible because publicly released news is immediately (in less than a second) incorporated into asset prices, according to the efficient market hypothesis. Thus (unless you are one of the big guns of Wall Street trading at light speed) by the time you read that a country or a company is doing well or poorly, it is too late for this to give you any insight on what you should buy or sell. The 5% that is relevant could be relatively timeless commentary on asset allocation, minimizing fees and taxes, etc.

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    For some types of news this is the case, for others, not at all. Most of the news that is relevant to investing, though, I would agree does not come from the financial press, but rather the press that is recording what is going on in the rest of the world where economics is actually unrolling day by day. Political news, industry news, the popular press, etc, all contain clues about what people are doing, what they're intending to be doing, what they'd rather be doing, and what they're upset about... these are all important financial clues.
    – J...
    May 13, 2019 at 13:39
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    @J... The question (and thus the answer) is explicitly about "the financial press".
    – pipe
    May 13, 2019 at 15:16
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    The "less than a second" claim seems unnecessary and implausible. There are plenty of market-shifting public events that take more than a second of human attention to recognise their market importance. Perhaps after whatever time it takes to form a particular judgement from the news has passed, this is incorporated into asset prices within a further second, but that's quite far from saying that news is only relevant for one second. Big news stories precipitate increased volumes and price volatility over the span of multiple trading days.
    – Will
    May 13, 2019 at 17:01
  • @pipe Indeed, and that's why I made the statement explicit. It's an important caveat that, while financial news may be backward-looking (and while some minority of financial news may be forward looking) this doesn't necessarily mean that other news may not be useful for developing an investment strategy.
    – J...
    May 13, 2019 at 17:02
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    While this may be true, it doesn't seem to be what he's trying say when he says "off the mark – way off the mark". He's not just saying that the information is too outdated to be useful, he's claiming that it's totally wrong.
    – Barmar
    May 13, 2019 at 19:50

While only the author of that statement can tell you exactly what was meant, I would relate it to a seemingly similar argument made by Nassim Nicholas Taleb in "Fooled by Randomness" that it's pointless to pay attention to the daily (or hourly) updates on what is happening in the news or markets. His assertion is that it's mostly noise and statements from the press like "the markets moved up 1% on jobs numbers" are purely conjecture because there is no way that the daily, (hourly, minute-to-minute) news cycle has empirical knowledge of why the markets moved one way or another.

On a side note, this specific article appears to prove it's own point. Essentially it says: "the Economist is wrong, look at this table created by me, see?" Even if you assume the author's numbers are better, look at how many zeros there are in the last two figures. The precision on this is really low and when you compound imprecise numbers they get much more imprecise. In other words, the article states that the author's analysis leading to an obviously imprecise figure is 'right' and that some other body's analysis is 'wrong'. But at this level of imprecision and lack of reliable information, the meaning of 'wrong' or 'right' is a fuzzy concept. And either of rates of inflation means that the currency is in a death-spiral. The difference (as large as it is) has no practical implications. You aren't going to decide to buy Zimbabwe dollars because you used the IMF numbers.

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    "are purely conjecture because there is no empirical way to determine why the markets moved one way or another." Not only conjecture, but arguably meaningless. If there are ten things that move the market up 1 each%, and nine things that move it down 1% each, does it make sense to single out one of the things that moved the market up and say the rise is due to that? May 13, 2019 at 15:43
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    Are you seriously suggesting that there's no objective difference between an imprecise 12-figure number and an imprecise 23-figure number because both are imprecise?
    – sgf
    May 13, 2019 at 15:46
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    And the Cato institute's complaint is that the Economist uncritically copies the IMF's faulty data, while they have published scientifically accurate (to a certain degree) data, which the scientific literature actually cites. They're not just saying "but we have other guestimates", which your answer seems to imply.
    – sgf
    May 13, 2019 at 15:47
  • @sgf What I am saying is that I'm not seeing a lot of evidence to back up the claim that these are "accurate estimates of Zimbabwe’s fantastic hyperinflation". The linked article makes a case that they have a better methodology but it's still based on unofficial sources such as the "data for the black-market Zimbabwe dollar/U.S. dollar exchange". Accurate to how many 100's of quintillions (the implied precision) exactly? How is it that the the precision went from basis points to 100s of quintillions percentage in one month? And what practical difference does this make?
    – JimmyJames
    May 13, 2019 at 17:25
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    @JimmyJames " Essentially it says: "the Economist is wrong, look at this table created by us, see?"" That's not what the article is saying, and you're misrepresenting it. You're tunnel visioning on the headline, without even stating that in your answer, making it misleading. If nothing else, my comments offer an opportunity to you to improve your answer, by showing you how I may have misunderstood it to target the body of the article, rather than it's headline. That's precisely what comments are for, so I think it's safe for you to unmount your high horse.
    – sgf
    May 14, 2019 at 14:41

My observations is that it's worse. My broker's computer feeds me news articles on financial markets, predictive indications in various industries, etc. They are 100% bad data for investment.

This bears repeating, not one of the articles supposedly selected specifically for me was of any use at all. I could have made more money taking the opposite action as would be encouraged by the financial news I received. The only reason I did not do so is I do not dabble in shorting stock.

I have a plan, and I know where I need to be in 20 years, and I'm having no trouble getting there, and my plan doesn't involving reacting to the news in the obvious ways. I look for when the market moves and the predicted benefit from the general headlines by my own analysis are in opposition to each other. Then I profit. Obviously to do this, I must understand the industries I invest in.

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