STREET DOGS

Whether concerning an individual stock, or the market as a whole, always ask yourself which would be more of a surprise: good news or bad news. News that is expected never has as much impact if any at all as news that is not. Andrew Tobias

Tobias’s book, “The Only Investment Guide You’ll Ever Need”, warned readers against elaborate strategies and complicated investments and was sceptical about brokerage advice and other come-ons that appear to be unbiased but often are not.

“Torn as we all are between greed and fear,” he writes, “we tend to do just the wrong thing. When the economy is sinking fast and stocks faster, we get more and more scared. Finally, we quit in disgust. Better to get out with the big loss, we say to ourselves, than to watch our holdings disappear altogether. In fact, of course, this is just the time to be getting into the market, not out.”

“Stocks will fluctuate. Variously attributed to Morgan, Rockefeller, Gould and others.

An observation that is undeniably true and virtually useless. It tells investors nothing about what the market will do within the time frame in which they generally try to make decisions. It does, however, counsel that anyone getting into the investment markets should not expect a steady, carefree ride.

“Stocks have reached what looks like a permanently high plateau. Irving Fisher

Fisher was perhaps the most famous economist of his time, and is still revered among professionals for his brilliant contributions to economic theory. To the public at large, however, his reputation rests on this fatuous statement, made on October 16, 1929, the week before the Great Crash, underscoring how hellishly difficult it is to analyse the market in real time, and that everyone has their own sets of blinders.