Understanding What You Do and Do Not Know

“Because as we know, there are known knowns; there are things that we know that we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns, the ones we don’t know we don’t know.”
– Donald Rumsfeld 

There’s a lot of things I don’t know:
1. How many people will be unemployed next month.
2. How much cash Apple had as of yesterday.
3. Whether Don Draper dies at the end of Mad Men.
4. Which sector will be leading next week.
5. How many tweets I’ll read today with the words “honey badger.”
6. Which will be the next big M&A deal.
7. Whether my last trade was impacted by high frequency traders.

But there are some things I do know:
1. The S&P is making higher highs as the up trend is still intact.
2. Stock participation, while still weak by some measures, has improved over the last couple of weeks.
3. Current seasonality and presidential cycle is bearish right now but has yet to be deemed important by the market.
4. Defensive sectors have been leading all year.
5. There’s someone in New Jersey getting a spray tan right now.
6. Traders still appear to be showing a preference for U.S. stocks over international.
7. There’s a high degree of complacency in the market right now but it won’t matter until it does.

Understanding and recognizing what you do know and what you don’t know can provide a great deal of clarity. So what do you know?
Disclaimer: Do not construe anything written in this post or this blog in its entirety as a recommendation, research, or an offer to buy or sell any securities. Everything in this post is meant for educational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned in the blog. Please see my Disclosure page for full disclaimer. Connect with Andrew on Google+, Twitter, and StockTwits.