Analysis degrades in transmission. A complete piece of work carries its premises, its data, its chain of reasoning and the range over which it applies. All four have to arrive for the conclusion to mean what it originally meant. Drop any one of them in the retelling and the reliability of the conclusion falls a step. Retelling almost always drops something, because reproducing an analysis in full demands roughly the same attention as reading it did in the first place. After three or four hands, what typically remains is the conclusion on its own.
Stories have no such problem. What sits at the centre of a story is a causal relationship and a set of actors, and neither of those loses much in transmission. A company controls a critical technology. An industry is undergoing structural change. A policy will reshape a competitive landscape. Statements of that kind fit into a single sentence, the listener can pass them on in another single sentence, and each retelling arrives complete. The form is built for travel, which is why the same handful of stories can be found circulating simultaneously in a dozen unconnected places.
The second property matters more. Analysis has to carry its conditions, because the conditions are part of the analysis: assuming rates hold, provided capacity arrives on schedule, if the regulatory environment stays as it is. A story remains a perfectly good story with all of that removed, and often becomes a better story for the removal. In transmission the conditions come away layer by layer. The first hand still remembers there were premises. The second considers them too technical to be worth mentioning. The third has no idea they ever existed.
What arrives at the end is a conditional judgement that has become an unconditional statement. Nobody lied anywhere along that chain, and every participant reported honestly what they had heard, yet the output bears little resemblance to the input. Each individual step involved a reasonable editorial decision about what the listener needed. Consensus forms through exactly this process. That is why it tends to form considerably faster than evidence accumulates, and why it can appear robust while resting on one unexamined source.
At the individual level there is a reasonably effective test. Take whichever story is currently believed and try to write out the premises it depends on, in the form of conditions that could in principle be checked against something. Producing three or four of them suggests the thing being held is a judgement. Producing none, or producing only restatements of the conclusion in different words, suggests the thing being held is a story. The test takes a few minutes and its result is usually unambiguous.
The value of this test is that it can be run at any moment and requires no new information. What it examines is whether the version that arrived is complete, which is a separate question from whether the market is behaving as expected. Those two questions get conflated constantly, and only the first is answerable in advance. The premises are usually recoverable in any case, since they remain in the original work where they were written down, and hardly anybody goes back to look for them.
Stories themselves are not the problem. Markets require narrative, because the future cannot be computed in full, and narrative is the main instrument people use for handling incomplete information. Removing it would leave nothing usable behind, only a residue too thin to support any decision at all. Damage comes from losing track of which of the two is currently in hand. It comes particularly from sizing a position as though a story were an analysis, since size is the point at which an error of category becomes an error of money.