When I was thirteen, I bought a book called Wipe Out. I thought I was getting a story about surfing, but instead I got a cautionary tale about the Stock Market crash of 1929 and all those people who were literally wiped out. Despite no mention of water or waves, or the girls I hoped to impress at the Jersey Shore with my rad surfing skills, the book turned out to be an interesting read about overconfidence and greed. Ever since then, I’ve had a fascination with the market, albeit from a distance. I own no individual stocks, and for what’s it’s worth, I never learned how to surf.
What I did learn, and have never forgotten, is what every investor, large or small, should know about the market. First, you can make a lot of money. Second, you can lose a lot of money. I own a few stock funds, which are a mix of all types of stocks and bonds that presumably protects my money when things go bad and makes me look like a financial wizard when things go well. I say this not to offer advice, but rather to move the narrative along. Let me say unequivocally – do not take my advice. I have made a little money, and I have lost a little money. If I was smarter when I was thirteen, and not afraid of being wiped out, I would have asked my father to invest the $500 I collected from my bar mitzvah in a stock market index fund until I needed it. Had I done that, I’d be sitting on nearly $100,000 today. Even I don’t take my good advice. And, by the way, after I counted all that bar mitzvah loot, I never saw it again. My father, on the other hand, had a very nice nest egg when he retired. You’re welcome, Dad.
I have some idea of why stocks go up or down, and I also know that for many of us, (the smart ones, not me) investing in the market is a long-term commitment. Yet, because a good deal of the resources I rely on for the rest of my life are linked to the ups and downs of the market, I am compelled to follow it religiously. It’s an unhealthy habit that can make a person go bonkers. An app on my phone makes it even worse since the phone never leaves my pocket and the information is available instantly and always. When the market goes up, it’s a lovely ride. When it goes down, it’s like paddling a canoe through the North Atlantic Sea. Smart investors, (again, not me) rarely look. Rather, they wait patiently for long-term happiness.
I know I’m not alone. Millions (many many millions) of people rely on the vagaries of Wall Street. They can’t all be experts and I suspect most are like me, praying that an ill wind, having nothing to do with the economy, will stay far away from their life’s savings. Should that ill wind pass through, causing more financial damage than I could absorb, I’d be forced to reenter the work force. If that happens, (and I hope it doesn’t) I’m confident I could get a job at Home Depot. I spend half my days there anyway, and I hear they have great benefits. It’s never been my dream to be a Greeter, but I can learn. “Good morning, nice to see you, be sure to check out the chainsaws in aisle 13.”
I’m human and I have bills to pay, and I begrudge no one that makes a killing in the market. However, few things trouble me more than when a stock goes up because a company does something bad that is perceived to be good. For example, it is common practice to lay off people – often thousands at a time – to improve a company’s bottom line. How does the market react to putting all those people on the unemployment line? The market loves it, and the company stock soars. I’m all for capitalism, but how is that not counter-intuitive, let alone right? It just makes me sad.
The story of Wipe Out is a story of speculation. I speculate that for good or bad I’m in it for whatever time I’ve got left and hopefully that’s still a long-term investment. Should I need to regroup, there’s another book on my shelf that deserves my attention. The book is called Pipe Dreams. When I bought it, I thought it was about all those stock market pipe dreams that would one day make me rich.
Not even close! It’s a book about riding the surfing pipeline along a perfect wave. Who needs Home Depot? Malibu, here I come.