Saturday, October 11, 2008

Ta(l)king Stock

Saturday morning should always be the time of the week when you're thinking most clearly. OK, that may not be the case if you have kids circling you like you're a totem pole, but out of the seven days/three parts of the day scheme of things, Saturday morning seems the best time to get some thinkin' done.

I was out walking Maverick this morning and thoughts drifted to the stock market, the economy, and why this week happened. I may be wrong, but I think that this week saw the single biggest percentage drop in the Dow's history. I don't get why it's happening, but that's not important. The important thing is to take advantage of it while it's happening. Co-workers were a little puzzled as I cheered the Dow on to losses of 777 and 638 points on Monday and Thursday. I didn't cheer in a rah-rah sense, more of a quiet little, "yeah, alright" way of acting. Stocks go down and stocks go up. Those that don't panic always win. That's my way of thinking, so I'm not going to get all out of sorts. I'm certainly not planning on hanging up the mic and going fishing soon, even though I think about it every day. Still, I'm a little concerned. Why?

Because people as a whole aren't patient anymore. We now live in a society where we can get everything almost instantaneously. We want the reward, but we don't want the risk. Investing is not a game, yet in the age of E-Trade, playing the stock market has become equivalent to managing your fantasy football team. If something's not working, you don't wait for it to turn around. You dump it immediately. If you can make a nifty little profit, you quickly sell and move on. It's been shown for decades that a calm, principled investment strategy yields the biggest return in the long run, but in times where we want it all, and we want it now, will that strategy hold for the future? I'm banking on it.

In the meantime, here's a conundrum: Since more people seem to be buying foreclosed homes, such that the number of existing homes sold is on the rise, can the foreclosure crisis actually solve the depressed housing market? If so, things indeed will come full circle.

UPDATE: My mom seems to be cancer free. Excellent news. Now if she can just stop tripping and falling into the oven door while trying to pull out a frozen pizza (true event), things will just be the tops.

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