Sometimes in Life, one just needs to take a break and do something different, something else for a bit. It doesn’t mean one does not enjoy that thing; it simply means that one desires some fresh air, a gulp of air to refresh and invigorate.
Well, folks, I am going for a gulp of air. I will be back, but for now, my writing will turn to e-books about the trading and investing world. I am going deeper than I have time to go here on a daily basis. It will be good for me, and, when I return, good for you.
Here are some thoughts to keep with you while I toil and learn more about the world in which I have written for some seven years now.
The Market Cares About One Thing
Ultimately, the market cares about one thing and one thing only – corporate profit. All the other “news” that drives the market is like varying degrees of insect bites or stings. Some are just annoying and others are more painful, but very few are deadly.
- The financial collapse that drove the market down to scary places in 2008 was about as painful as it gets, but it was not deadly, if you kept your wits about and did not panic. In fact, it was an opportunity of a lifetime to make some real money.
Be Wary of the Breathless Media
The news media is not about news, per se. True, the breathless media reports information when it comes out, but that reporting often has a bias. That bias is generally not political or social; rather it is financial.
- The news media bias is about making money and one surefire way to do that is to “sell” the news, and one surefire way to sell the news is to sensationalize it.
- We are a nation of “rubberneckers.” It seems few can’t turn their heads as they pass a car accident. This includes the talking heads, many a financial analyst, economists, and, some of the biggest names in the world of managing other peoples’ money.
Be Wary of the Smarty Pants
The financial world is filled with know-it-alls, smarty pants, if you please. Take all of them with a grain of salt.
- Talking heads mostly tow the company line, or they are just pretty, so they often are useless as tools for helping you understand the market.
- Financial analysts often have an agenda, so their contributions needs close scrutiny.
- Economists act as if their conclusions are scientific, but they are not. Despite computer modeling and years of education, economists make predictions based on abstractions and theory, so one has to keep that in mind when an economist such as Dr. Doom tells us year after year that the market is going to collapse. Eventually, though, he will be right, and the breathless media will hail him as an oracle, and that is where the problem begins again.
- Folks who manage other peoples’ money sometimes are arrogant and egomaniacal. So, when they come on TV with bluster and righteousness to tell you how it will be, don’t listen.
There Are No Oracles.
The Market R Us, and that means we humans run the show, and that means the market is often irrational.
- Don’t confuse irrational with stupid. As irrational as the market is when it blindly follows the breathless media, it will eventually come around to what the market ultimately cares about – corporate profit.
- Enjoy the hilltop screamers when they scream. They believe they are oracular, but, in fact, mostly they are just nuts preaching the apocalypse.
Opportunity Is Everywhere in the Market.
You just have to look for it.
- One caveat to this – if everyone is looking in the same place, turn your head to see what they are missing. A prime case in point is Netflix. To be honest, I could have bought it at $5 per share, but I bought into the consensus take on it – it was going nowhere in the old world of renting DVDs. Yup, follow my advice here.
Okay, folks, I will be back in a bit, but while I am gone, don’t forget my motto below. No matter what you do to make money, don’t let that keep you from living your life healthfully and with great gusto.
Trade in the day; invest in your life …
