Do it yourself

Markets do not fear bad news as much as they fear uncertainty. Bad news, when clearly defined, is often easier for markets to handle than ambiguity. A weak earnings report, a rate hike, a tax increase, or even an economic slowdown can be painful—but if the contours are clear, investors can adjust expectations, reprice assets, and move forward. Uncertainty, by contrast, paralyses decision-making. It obscures future cash flows, complicates risk assessment, and raises the cost of capital across the board. Understanding this distinction is essential to making sense of recent market behavior, where volatility often appears disconnected from headline severity. Bad news can be priced; uncertainty cannot The core function of markets is to price future outcomes (price discovery). This process relies on probabilities, assumptions, and models—none of which function well in the absence of clarity. When bad news arrives with sufficient detail, markets can respond decisively. A recession forecast, f...