EDUCATING ABOUT STOCKMARKETS

Stock markets are like corrugated roads

The longer I live, the more convinced I am that Australian stock markets and indeed stock markets all over the world am I like a corrugated road. The corrugations are accentuated by the inclines and dips laced into this uneven surface. I had can be up one-day, down the next, and all over the place as your skew from side to side on this uneven and jarring road.

In my opinion, there is nothing predictable about the stock market and it doesn’t seem to be underpinned by any common sense. You can slip and slide all over the corrugations, sometimes being displaced by the fact that traversing what might be termed an overly clay based surface causes skidding and sometimes the overturning of vehicles. Those vehicles being the stockholdings of particular people who are going through a rough and skinny patch at the moment.

Then of course there is the bulldust. It’s so easy to get caught out. It’s up and down and all over the place on a daily basis.

Thank God for analogy. In another context I think of stock markets is being like yo-yos; up-and-down and up-and-down and up-and-down. Sometimes of course the string breaks and until it’s fixed the yo-yo itself is in a deep, detached and often long term plunge. Then things can write themselves and you again go back to being on that poorly surfaced road.

Having the stock market as an adjunct to personal wealth might be fine but I would hate to have all my eggs in the one basket. I would hate to be dependent upon the stock market for my life.

Stock markets are about twists, turns, whims and fancies. Their only everlasting quality is their eternal unpredictability.

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