# Cutting through the noise: what we actually mean

_Every financial publication promises clarity. This one is named after a specific problem: the noise that surrounds every investor, every day. Here is what cutting through it actually requires._

Neil Woodford · 23 June 2026 · 6 min read

![Cutting through the noise: what we actually mean](https://cdn.sanity.io/images/v3acfbvo/production/b51d1980a6b404c19aa216124fe2a77450f69cdb-2240x1260.png?w=1600&fit=max&auto=format)

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In my experience, the question most investors ask — which sources to read and which to ignore — is probably the wrong one. The question is not which sources to add or subtract but whether an investor has a framework that enables them to process a lot of information and noise and gives them the tools to know which signals are worth listening to and which are not.

That framework is what _Noise Cancelling_ is built on. And since the name is in the title, it is worth being precise about what the noise actually is, why it is so hard to tune out, and what it takes in practice to cut through it.

## What do we mean by noise?

Share prices move every day. Most of the time, volatility has nothing to do with any change in the underlying value of the business but instead reflects the complex interactions of many buyers and sellers. A fund manager rebalances a portfolio after an outflow. A macro trader reacts to a jobs number. An algorithm responds to a chart pattern. The price of a business goes up or down, and no fact about the business has changed.

The short version:

> The value of the business hasn’t changed, but the price has.

That is the noise problem in a sentence. Price and value are not the same thing. They travel together over long periods, but in the short run, they can diverge considerably. Those divergences generate a constant stream of seemingly informative signals that are almost entirely meaningless to a long-term investor.

Many people believe charts should guide investment decisions. My answer to that is straightforward: I believe that charts have zero predictive value. 

Fundamental analysis and valuation judgements should be the foundation of those forward-looking decisions. In the short term, share prices are very noisy and volatile, moving for all sorts of reasons that have absolutely nothing to do with a business’s fundamental characteristics.

The noise, then, is price movement without informational content. The signal is anything that tells you something real about the value of a business. There is considerably less of it than the volume of output from financial media would suggest.

## Why is it hard to tune out?

Understanding this distinction is not the same as acting on it. The noise has two properties that make it difficult to ignore.

First, **it is loud**. Financial markets are continuous. Prices update in real time. Commentators interpret every move immediately and at length. The ratio of noise to signal in financial media is, in my view, very high. The medium also rewards immediacy over accuracy. A journalist who says "nothing has changed" files no story. So the news is constantly framed as consequential, whether or not it is.

Second, **it has emotional weight**. A holding that falls 20% in a week feels like evidence that something is wrong. The normal human response is to sell, to buy more, or to search for an explanation. All three are reactions to the price, not to the business. 

Maintaining discipline means resisting the urge to respond to market noise and volatility, and what should guide an investor through a noisy period is knowing the fundamentals of the business, understanding why it is in your portfolio, and, most important of all, knowing the right valuation of the business.

The description "noisy" is worth noting. There are periods where the noise is louder than usual. The US renewable energy sector in the first half of 2025 was a good example: a constant stream of political signals, congressional votes, policy reversals and speculative trading. For a position in that sector, the daily news flow was almost entirely noise. Anticipating each lurch would have required knowing the minds of sometimes one, sometimes hundreds, of politicians and the reactions of hundreds of thousands of market participants. It is an impossible task.

The only way through a classically noisy period is not to find better information about the noise. It is to have done the fundamental work before the noise begins.

## What the signal is

Signal is rarer than noise. But it is not mysterious. It is any piece of information that updates your assessment of a business’s value.

A company reports results that reveal a fundamental deterioration in its business fundamentals. That is a signal. A regulatory change may alter the competitive dynamics of an industry in a lasting way. That is a signal. A management team makes a capital allocation decision that changes the long-term outlook for a business. That is a signal.

Price movement alone is not a signal. A sharp fall in a share price tells you that sellers outnumbered buyers on that day, and nothing else. Whether the fall reflects something real or represents an opportunity depends entirely on whether something about the business has changed. The answer to that question requires some effort and some fundamental analysis. It cannot be answered by looking at a line on a chart.

This is why I have never used stop losses, price targets, or technical indicators as part of my investment process. 

Stop losses are a rigid form of psychotherapy. They can reassure investors that their losses are limited, but investment activity should always be guided by valuation judgements rather than price volatility. A stop loss might trigger a sale at precisely the point when an investor should be buying. In effect, these techniques outsource investment decisions to the market, which is fickle, emotional, volatile and frequently irrational.

What should drive an investment decision is, as I have said consistently over many years, a long-term assessment of the difference between a business’s intrinsic value and its share price.

## The product is clarity, not more information

The abundance of financial information is not the problem. Access has never been better. Data, analysis, commentary: there is more of it than any investor can consume. The problem is that more information does not reduce the noise. It often adds to it.

A publication that adds to the volume of vacuous commentary helps no one. The promise of this one is the opposite: fewer pieces, but each seeking to earn its place, each built on a clear view about what matters and why.

What clarity requires is not a better information feed. It requires a framework for separating information that updates your view of a business from information that does not. 

[The seven decisions](https://www.noisecancelling.co/read/the-seven-decisions-explained) that organise this publication are that framework. Not "what happened today in markets" but: [is this a good business](https://www.noisecancelling.co/learn/is-it-a-good-business), is it at the [right valuation](https://www.noisecancelling.co/learn/is-it-the-right-price), when do I [change my mind](https://www.noisecancelling.co/learn/when-to-change-your-mind)?

_Related:_ [The seven decisions, explained](https://www.noisecancelling.co/read/the-seven-decisions-explained) — Every investor faces the same seven decisions. This is the framework behind everything on Noise Cancelling, and how Neil Woodford has approached markets across thirty-five years of managing money.

Those questions do not change when markets get noisy. They are arguably more useful in the noise than in the calm, because calm periods rarely force investors to test whether their conviction is grounded in something real.

## What does holding your nerve actually mean?

I want to be clear about what "cutting through the noise" is not. It is not equanimity for its own sake. It is not a general instruction to ignore everything and hold forever. Tuning out the noise requires, as a prior condition, that you have done the work to distinguish it from the signal.

An investor who holds through a drawdown without conviction is not disciplined. An investor who holds through a drawdown because they have a clear view of the business’s value and that view has not been changed by recent events is making a considered judgement. The first, arguably, is stubbornness. The second is what I mean.

Going back to the question I am often asked about charts. My answer ends with this:

> What should drive an investment decision is a long-term assessment of the difference between a company's valuation, or intrinsic value, and its share price.

That is the only basis on which holding through volatility makes sense. Without it, you are not cutting through the noise. You are simply ignoring information you have not yet evaluated.

This publication cannot do the valuation work for any reader. What it can do is show the reasoning, case by case and decision by decision, so the reader understands what the work looks like and can eventually do more of it themselves. 

You will never find a tip, a score, or a buy signal. Instead, you’ll find a method, explained in real situations, by an investor who has used it for a long time and is prepared to show when it went wrong.