bankrx/iStock via Getty Images Co-authored by Treading Softly. Douglas Adams is famously recognized for his series of books, radio shows, and, eventually, movie adaptation entitled The Hitchhiker's Guide to the Galaxy . In the past, we have frequently referenced parts of his works in a humorous fashion to illustrate a point when we are discussing the topic within the market or a principle with our investment philosophy.
We even adhere to the Rule of 42 — guiding us to have at least 42 unique investments for the sake of diversification — which is a play on 42 being "the answer to life, the universe, and everything." When it comes to the known universe, nothing travels faster than the speed of light, except for maybe bad news. Douglas Adams had some unique thoughts on this as well: "Nothing travels faster than the speed of light with the possible exception of bad news, which obeys its own special laws.
The Hingefreel people of Arkintoofle Minor did try to build spaceships that were powered by bad news but they didn't work particularly well and were so extremely unwelcome whenever they arrived anywhere that there wasn't really any point in being there." Within the stock market, nothing travels faster through share prices, brokerage houses, or the investor community than bad news. We can see that when the share price drops rapidly due to investor reactions, it just causes the news to spread faster.
Often, good news is received and partially disbelieved with a level of skeptic.
