IFB298: Causation Is Not Correlation

Welcome to the Investing for Beginners podcast! Today’s episode will all be about beta, causation and correlation in the stock market! It’s quite a technical topic as it is hard show numbers through the podcast but we will do our best as always to piece it together as simple as possible. Listen on as we take a deep dive into volatility, what drives a stock price and more!

Timestamps of the episode:

-What is Beta and how is it being used in the stock market? [01:53]

-Volatility and risk are not the same and will never be. [05:55]

-Using Beta as part of your hurdle rate. [13:16]

-The seemingly random relationship between causation and correlation in the stock market. [15:50]

-How index funds and sector ETF’s affect a particular stock price. [19:56]

-What really moves a stock price up and down? [21:26]

-The stock market in the short term is a voting machine, and in the long term it is a weighing machine, a timeless Graham quote. [24:20]

Note: Timestamps may differ and are approximate, depending on your podcast player.

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You can find the transcript of today’s show below:

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