Trust, but Verify.

This elegant expression lies at the heart of how our financial markets work.  It also highlights the respective roles narratives and transparency have in these markets.

Everyone likes a good story.  It is in our DNA.  How we think is organized around narratives.  So it is not surprising financial markets run on narratives.  These narratives allow us to organize the massive amount of data these markets generate.

Wall Street understands this too.  Wall Street recognizes people don’t buy and sell securities.  They buy or sell the stories told about these securities.

Instinctively, because of how we think, we want to trust Wall Street’s stories.

But before buying or selling based on a Wall Street’s story, investors need to verify if the story Wall Street told is true or not.  And the only way investors can verify if the story is true or not is if the information they need is disclosed.

By design, transparency is the antidote to Wall Street’s story telling prowess.