The stock markets all around the world are on a rollercoaster ride. It is yet another proof of the interconnectedness of our world and in a time like this, such interconnectedness can be a bane. The slightest news of little relevance—never mind the more substantial developments—from the other side of the world can rally or rattle the markets. These are days of pessimism and this kind of pessimism it is a little bit unhealthy.
It is painful to observe the stock markets. If to keep an eye on it is an exercise perfectly suited for sadists, to have a direct stake in the markets makes the whole enterprise all the worse.
Each day brings a kind of consternation. Will tomorrow be better or worse? Should I buy or sell now? Will tomorrow be delightfully unexpected or depressingly expected? Is that light at the end of the tunnel? Or is that a headlight for a speeding train?
These questions and its variants have been asked increasingly frequent over the past few weeks. The answers are not always forthcoming unfortunately. Sometimes, there is none to be had.
That is partly the fickleness of the markets resulting from the markets trying to incorporate everything it could. That fickleness grants rest to none, forcing all to stand guard around the clock.
The fickleness and volatility of the market are tiring. Whatever the benefits of the markets as a leading indicator of the wider economy, all the attention it demands is tiring. It consumes too much time and energy, all just for the small satisfaction of not losing money in a blink of an eye in this kind of prevailing environment we live in.
As a graduate student once, I had to model certain relationships involving the stock market. The volatility of the market presented a challenge because too much data can lead to the wrong conclusion. The data series was too “noisy.”
A friend suggested cutting the frequency of data from daily to weekly as a solution. Others suggested logarithmic difference. There was a bunch of other novel methods aimed at doing the same: filtering out the incessant noise in hope of squeezing something tangible and real out of the data series.
The stock markets do tell something, but its fickleness neither tells everything nor is everything it tells is necessarily true or relevant.
There lies some wisdom to go beyond the mathematics and economics puzzles. I find the wisdom helpful in keeping myself from frowning yet again, sighing continuously and from suffering mood swing as wild as the market.
I have decided that I will not go mad over the market. I have applied less weight to the importance of the stock market with respect to myself. At least for now, I have decided to have less exposure to the craziness of it all.
If European politicians and bureaucrats could go on summer holidays amid a frighteningly global crisis, surely others inconsequential to world’s history can take some justifiable break of their own. The grand narrative of world’s history is unlikely to twitch for me.
I do not want to be the guy who sits in front of the screen staring in a broker house, hoping for the slightest opportunity to make money. Or that guy drawing meaningless lines trying to outsmart the market, the efficient-market hypothesis be damned.
No, I have decided to live a life more, and worry a little less.
There is money to be had, and it is always nice to have a little bit more money in the pocket. Yet, one has to asked, at what cost?
There is more to life, and the economy even, than the fickleness of the stock markets.
2 replies on “[2435] Oh the fickle markets”
So Tunku goes over to the Star, and well, good for you, the Sun.
Anyway, like I observed many moons before, most markets are sentiment-based, especially Asian bourses.
I myself was doing a paper on the fluctuations.
There “is” a certain relationship when you look at the big picture, but you’re right, life’s too short.
Still, there’s value to be had if you really know where to look.
Not exactly. I’ll only appear once per month, more or less.