Personally, I’ve never had much respect for the stock market. In fact, on some days, the news of the stock markets are the chief source of amusement that I and some colleagues of mine have. I hardly ever pay any attention to the Stock Indexes except when I am feeling bored. When I feel the need for some light relief, some of us open the day’s live Dow Jones graph on finance, point it out to each other and laugh heartily, as if it were some great joke. We never feel there’s anything strange about this behaviour except when we end up doing this in front of a visitor who, in turn, starts looking at us as if there is something strange about our behavior.
Now I know this sounds heretical coming from someone whose vocation appears to be linked to the stock market, but I really do feel that there is something funny about the daily curve of the stock market graph. Or more precisely, about the deep meaning that so many people are trying to derive from it.
Am I saying that the stock market is a meaningless circus then? No, far from it. The stock market, along with the stock prices of all listed companies and the levels of the various indices are extremely important to the countries and to many of us’ economic well-being. What is a meaningless circus is the minute-to-minute hyperventilate tracking of these things. Let me explain it this way. Tracking and predicting the weather is an important function but lying on the ground and trying to draw meaning from the changing shapes of clouds being chased by the wind is madness.
When we look at the day’s stock curve and laugh, we are actually laughing at those who are lying on the ground and trying to predict the clouds’ movements. Take a couple of days back for instance, the day when I’m writing these lines. The markets opened at somewhere and moved up to yet another an all-time high and then collapsed by about 140 points by noon. It then made many half-hearted attacks at the previous close and was eventually successful, reaching positive again before ending the day. All in all, it was a fairly entertaining day. Just like
As I said earlier, to get the full entertainment value from this production, you have to be thinking of the cloud watchers, which include individual cloud watchers who call themselves investors as well as the hyperactive cloud-describers on TV.
There is a lesson in all this. Far too many people are getting carried away by the general idea that the stock indices are an important indicator of something but everyone has a different idea of what that something is. People are buying all sorts of dubious investments just because the Dow Jones is at 14,000.