She's got a ticket to ride
But she don't care
--The Beatles
Trying to work down my reading backlog, I cracked open Fortune's semi-annual investing issue and happened across a piece by columnists Allan Sloan titled, "Worried about the stock market? Here's the I advice I give my family." (can't find the link in Fortune archives)
It's basically a rehash of the tired message of 'don't get caught up in the day to day gyrations...relax and be in it for the long haul.' He claims that 'amateurs' have no business reacting to market movement--that's a 'participant sport' that should be reserved for 'market pros.'
My response is that if you're an 'amateur,' then why are you involved in markets at all? You are competing against people who have done their homework to make informed decisions. Concluding that somehow your amateur status will benefit you if you stay distant and 'ride out declines' seems seems like a lottery mind set to me.
And a ticket on a ride to the poor house.
position in SPX
Reference
Sloan, A. 2010. Worried about the stock market? Here's the advice I give my own family. Fortune, June 14: 55.
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"Let me tell you the story of the oil prospector who met St. Peter at the Pearly Gates. When told his occupation, St. Peter said, "Oh, I'm really sorry. You seem to meet all the tests to get into heaven. But we've got a terrible problem. See that pen over there? That's where we keep the oil prospectors waiting to get into heaven. And it's filled—we haven't got room for even one more." The oil prospector thought for a minute and said, "Would you mind if I just said four words to those folks?" "I can't see any harm in that," said St. Pete. So the old-timer cupped his hands and yelled out, "Oil discovered in hell!" Immediately, the oil prospectors wrenched the lock off the door of the pen and out they flew, flapping their wings as hard as they could for the lower regions. "You know, that's a pretty good trick," St. Pete said. "Move in. The place is yours. You've got plenty of room." The old fellow scratched his head and said, "No. If you don't mind, I think I'll go along with the rest of 'em. There may be some truth to that rumor after all."
~Benjamin Graham
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