I'm currently reading Taleb's fascinating "Fooled by Randomness".
So far my favourite argument therein - and the one most likely to interest readers of this blog - is that investors with access to more regular news will be less happy than those with access to less regular news. Consider - I invest £40 grand in a portfolio of assets, let's say some tracker funds. They go up, on average, 20% in one year. If I check my portfolio when, say, my stockbroker sends me an annual statement I'll see a 20% gain and be briefly pleased. If I check my performance every day, though, volatility means I'll see far more regular tiny losses and gains and - here's the kicker - since people get more of a bad feeling from a loss than they get a good feeling from a gain I'll be a lot more unhappy than if my attitude to loss was (emotionally) symmetrical.
Which tells us...what? The daytrading phenomenon of the dotcom bubble made (some) people (briefly) rich and happy because (almost) everything was going up. But combine access to realtime market data with a volatile market that's enjoying less spectacular performance and the greater access to realtime data you have, the less happy you'll be about what it tells you.
Them crazy daytraders. Most people don't check a share portfolio once a minute, once a day or even once a week. Politicians watch opinion polls with the same degree of (wholly wasted, depressing) attentiveness, but few of us are so obsessed with politics either. So what's the closest equivalent of daytrading/opinion poll blindness for the average news consumer? Perhaps houseprice news. There are a lot of homeowners out there reading newspapers and websites. Yet drop "house prices" into Google News and see what you can glean from the pattern of stories there. Right now (about 11:30 GMT) I see the following list of headlines spanning just 24 hours:
House prices rise despite weaker demand
"House prices will fall by 6% in 2008"
House prices slump as consumers tighten belts
UK housing market teeters on brink of Northern Rock
Measuring UK house prices
October house prices rise shocks property analysts
House prices show surprise rise
House prices "stubbornly robust"
What does any of this manifestly contradictory "news" tell us? Almost nothing, except perhaps that people have a lot of their money invested in their houses and like to keep an eye on it. I recommend you don't follow the trend. As Mark Wainwright summarises, "the more often you look at some fluctuating quantity, the less meaning your observations have". More importantly, you'll just depress yourself. Realistically, you don't need to know what your house is worth until you come to sell it. So don't make yourself miserable. Wait until the day the estate agent comes around, and in the meantime ignore the alleged fluctuations.