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Stanley Bing has an amusing post up today about the qualities of the stock market and how they translate into a person.
Among them, he offers up:
Rich: There’s a lot of money in the stock market. Having all that money doesn’t really make it any happier, though.
Nervous: In fact, being so wealthy and privileged makes it incredibly anxious. If peace of mind rests in the feeling that one has nothing to lose, the Market is the exact opposite. It has everything to lose, first and foremost in its anxious, monkey mind.
Greedy: Over-riding that anxiety is a fine patina of opportunism and atavistic desire to get more, have more, to profit while others are screaming down into the ocean of defeat. When the greed overcomes the nervousness, the Market is happy and flies very high;
Gutless: On the other hand, even the specter of a shadow of a doubt that things could go the other way and the Market starts heading for the exit. In a disaster, this is not the person you want in the lifeboat with you. If it doesn’t push you overboard, it will try to eat your leg;
Intelligent: Nobody is saying the Market is stupid. It’s not. It’s just like a lot of my friends — too crazy to be smart a lot of the time;
Irrational: I don’t care how many PowerPoint presentations investment bankers, lawyers and security analysts offer to me at boondoggles past, present and future, nobody will ever convince me that the Market is rational. Buffett to the rescue! Hurrah! Let’s go up! Oooh. Wait. Buffett’s motives are impure. Ouch. Let’s go down. Sure, apologists for the Market will come up with a million reasons it does things. So do we all.
Of course it's possible to beat the market. It can be done, and it has been done.
But the more important question: is it worth it? What will it cost you to beat the market?
I don't know about you, but I don't have the time or money to try and beat the market. The chances of it happening are slim, and even if it happens, it'll cost you the difference in fees.
I got a good, albeit long joke in my email this morning on the subject:
Once upon a time in a village, a man appeared and announced
to the villagers that he would buy monkeys for $10 each.
The villagers seeing that there were many monkeys around,
went out to the forest, and started catching them. The man bought
thousands at $10 and as supply started to diminish, the villagers
stopped their effort. He further announced that he would now buy at
$20. This renewed the efforts of the villagers and they started
catching monkeys again.
Soon the supply diminished even further and people started
going back to their farms. The offer increased to $25 each and the
supply of monkeys became so little that it was an effort to even
see a monkey, let alone catch it!
The man now announced that he would buy monkeys at $50 !
However, since he had to go to the city on some business, his
assistant would now buy on behalf of him.
In the absence of the man, the assistant told the villagers.
"Look at all these monkeys in the big cage that the man has
collected. I will sell them to you at $35 and when the man returns
from the city, you can sell them to him for $50 each."
The villagers rounded up with all their savings and bought
all the monkeys. Then they never saw the man nor his assistant,
only monkeys everywhere!
Now you know how the stock market works!