Peeper Lessons

Do you hear them in the evening?

Photo: David Huth. Source: Flikr. CC-BY-2.0

Nothing says spring in New England like peepers singing out in the dusk. When I drive home from work I can hear their chorus when I go by any wetland or even damp spots along the road. I don’t even have to roll down my windows. Peepers are small, usually less than an inch long, and they weigh just a fraction of an ounce. But when they get together, the sound can be deafening. A large gathering in the right location can be heard more than a mile away. The males are the ones singing the mating call, and the greater the competition, the louder they chirp.

When you listen to a chorus (like the link above), sometimes the sound seems to be ordered into discernable rhythms. How can this be? Each male is competing with the others, displaying his genetic fitness. How can their peeps be coordinated? It’s not like there’s a peeper-conductor waving a reed as a baton.

In fact, each peeper sings to his own beat, and they wait the same amount of time between chirps. They’re not trying to sing in unison, but with thousands of peeps sounding out every minute, they fall in and out of sync on a regular basis. Our brains are wired to look for patterns, so it sounds like the chorus has been organized.

Markets act the same way. There are thousands of stocks moving according to their own internal and external news flow. Each company has earnings reports, new products, leadership changes, and is affected by the economy and financial developments. The news comes at them every day, but its impact is different for different firms. Each company “peeps” according to its own schedule, and its behavior in the marketplace is unique. Taken in aggregate, however, it can look like there’s a market-conductor up front, waving a market-baton.

Photo: Rob Swystun. Source: Flikr. CC-BY-2.0

Our brains, however, can impute coordinated patterns from a gathering of random movements. We see pictures just like we hear patterns in peeper-songs. Not every market has a story, but we’re story-telling creatures, building our lives around narratives – some heroic, some mundane – always with a recognizable outline. And sometimes the stories we tell ourselves lead us astray.

I love hearing peepers on a cool spring evening. Their song evokes hope, hope for longer, warmer days ahead. But that’s another tale, one that the frogs don’t know anything about. Their only story is the one they’re singing right now.

Douglas R. Tengdin, CFA

Charter Trust Company

“The Best Trust Company in New England”

By |2019-04-30T07:54:17-04:00April 30th, 2019|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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