From the editors: Making sense of the data overload

Hyperbolic business pundits have made a mess of market analysis. The Investor 500 charts a different path.

Screenwriter William Goldman once observed: “Nobody knows anything.” The Oscar winner was talking about Hollywood’s ability to predict hit movies, but too often it seems the same axiom holds true for the financial world. Nearly four years after the market crash, a pall of uncertainty still dominates. A slow-but-steady recovery is underway—unless you believe the pundits who say a second collapse looms. Or the folks who say we’re headed for a boom and just don’t know it yet. And yes, it’s truistic to note the market is unpredictable, but the inherent uncertainty has only been exaggerated by the hyperbolic business pundits who populate our television screens, the financial oracles of varying credentials who dwell online and the mountain of raw data anyone of us can now access with a few keystrokes. Information and opinion are now both cheap commodities, but there is a permanent shortage of trustworthy analysis. The Investor 500, which you’re currently reading, is meant to address this shortfall. Built upon market information compiled and analyzed by Phil Froats, our sagacious data manager, this package offers insights on items like the best managed, fastest-growing and best value stocks—with ample evidence to back our conclusions. Joanna Pachner, our editor-at-large and this issue’s principal architect, added additional annotations and commentary throughout our market guide to give readers added layers of context and commentary.

Among the stories you’ll find in the pages ahead is staff writer Rachel Mendleson’s look at a Canadian mining firm’s efforts to resurrect a Texas ghost town, thanks to a booming silver market (p. 26). As Mendleson notes, the price for silver has nearly tripled since 2009, and the stunning rise has been greeted with enthusiasm, skepticism and even conspiracy theories. As the piece underwent its final polish, silver suddenly suffered a slide, dropping 10% within a single day. For a moment, it looked like our article would need a rewrite, a fact that underscored not only the daily surprises that come with financial journalism but also the uncertainty surrounding the current market. In the end, the drop proved temporary and only supported Mendleson’s observation that the silver market is fickle. Its instability has real implications for entire communities, and for one Texas town the difference between salvation and dereliction will likely be a tick upward or downward on a fever chart.

Elsewhere in the issue, you’ll find senior writer Thomas Watson’s look at high-frequency trading, which suggests even those with a firm grasp on market fundamentals may not be able to explain everything that’s happening on the exchanges these days (p. 56). Meanwhile, Matthew McClearn asks whether farmland is the next big investment opportunity or just another potential bubble (p. 32). We also offer stock picks from some of Canada’s top fund managers (p. 40) and advice for investing in a period of inflation (p. 24).

All told, there are more than 55 pages of market data, analysis and insight within this issue. Faced with non-stop, often contradictory chatter, investors can be forgiven for thinking nobody knows anything. But there’s still insight to be found beyond the bafflegab. More important, armed with the right guidebook, investors can reach some smart conclusions of their own.