EPIPHANY OF THE DAY

 THE MARKET

Woe be unto the one who attempts to predict the stock market. I’m not aware of anyone who has done that persistently and successfully. A woman did predict the market fall in 1987. She promptly rose to prominence and more quickly fell into obscurity.

Truth is, the stock market can’t really be predicted on any form of reality. It is gambling. Gambling. Big players simply play the hand that is dealt them. Those big players include people who manage mutual funds. They rarely beat the market.

Ironically, there is even an approach called “contra-investing.” It simply bets against the congregate opinion of market gurus.

One who watches the market can easily become confused.

One day, an increase in employment “scares the market” because of inflation fears.

One day, an increase in employment leads to a market rise based on a stronger economy.

One day, an increase in treasury rates “scares the market” because of reduced corporate productivity.

One day, an increase in treasury rates leads to market increases based on more discretionary spending based on higher earnings for fixed-income investors.

Fact is, they don’t know. But “lemming-like” behavior is what truly influences the market. This is behavior more pertinent to gambling than reality.

Couple this with the fact that too many corporations place making their executives and stockholders rich as more important than providing a product designed to make things better. That leads to the most common ploy involved in seeking economic health: Tax cuts for the wealthy. The same basic thought process leads to cities allowing the rich to wall off their subdivisions, while receiving full municipal benefits, as the ultimate method of handling crime.

For the average American, history suggests that stability is the most important force in a healthy economy.

That is the last thing the gamblers want.