Comic Strip of the Day

CSotD: Kay Serra, Stock Market Expert

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Mike Peterson Published: October 10, 2012 1 minute 3 comments

Randy Glasbergen's "Better Half" is like the player who, when you look at the box score after the game, you find was one of the high-scorers even though he didn't take any spectacular shots from beyond the three-point line. He simply makes the shots he takes, and it adds up.

Today, Glasbergen hits on a point that dovetails neatly with yesterday's rant about instant analysis and how consistently stupid and superficial it seems to be.

Part of the reason the stock market is such a sucker bet for the little guy is the persistent myth of causality, which is perpetuated by the experts who claim to be able to explain every lurch and surge.

Another part is the self-fulfilling prophecy factor, by which people really do buy-and-sell based on perceptions, and a perception, by definition, can't be bogus. Only the supposed facts it is based on can be bogus, and they certainly tend to be.

That is, if Angela Merkel makes a speech about the EU economy and, at the same time, stocks take a little drop, it will be reported as "investors were concerned …" and jittery players will respond by dumping stock. Meanwhile, even more sensible investors will see what's happening and join in, simply to avoid being left behind in a rush.

The most sensible investors will do nothing, realizing that, if the market had taken a coincidental upward bounce, it would have been reported as "buoyed by Merkel's tough talk …"

You can't, however, make a living going on the radio or writing a column in which you consistently say, "The Dow Jones went up today, for no particular reason anybody can prove," though you can do all right in the market itself without attributing its daily movements to anything in particular, as frequent "dartboard" investing exercises tend to prove.

As for the brokers themselves, when you make your living getting people to churn their portfolios, your income depends in large part on the fact that you can spout off about the supposed effect of political speeches and earnings reports and agricultural forecasts and people will believe you.

(Just don't talk about the full moon or wooly bear caterpillar markings — I think the SEC gets upset with that. Maybe not.)

People who play in the market — and it's only "playing" when the company directors own 52% of the voting stock and the trades that matter happen in quantities of at least 10 times your total holdings — talk about their investments the way scratch-off addicts talk about the lottery: They usually break even, but they win a little now and then. Yeah, right.

The big difference being that, when somebody starts talking about the formula they use for choosing their Pick-Six numbers, incorporating their children's middle names and the dates of their birth, people snicker, but when people elaborate on how the cost of oil on the Pacific Rim effects the market for goose feathers, people stroke their chins and nod wisely, as if this weren't simply a case of playing Dungeons & Dragons for real money.

I mean, people chuckle at the fans who dress up for Comic Cons or Star Trek conventions, but the main difference between some guy dressed up as a Klingon and some guy dressed up as Gordon Gekko is that you don't need to pass a test and get an official certificate showing that you actually can speak Klingon. 

Plus it takes longer to learn it.

And nobody is suggesting that people drop Social Security in favor of purchasing Tribbles, which brings to mind this David Horsey panel from 2004:

Mike Peterson has posted his "Comic Strip of the Day" column every day since 2010. His opinions are his own, but we welcome comments either agreeing or in opposition.