The Only Time The Stock Market Is Rational Is When It’s Not A Stock Market – Part III
Why in the hell is any of this even necessary?
Simply: The worst possible thing we can do, as the most prudent class of investors the world has ever known, is to think we can second guess this irrational beast: to think she can ever be rational or that we can fully understand her, and to assimilate these into our thinking. Then she would win, instead of us.
The extent to which we believe in the rationality of the stock market should be the general acknowledgement that the process of pricing things generally makes sense, but never any more than that. The moment you ever assume the stock market is “currently irrational” is the moment that hidden in that assumption is your anticipation for it to become something you can know. That is the moment of loss. That will be the tipping point.
The closest thing to being rational about the stock market is merely being more rational relative to the other players; that is your single most important weapon you can bring to bear. That is the only way you can be smarter and win.
The purpose of this seeming rant is to provide you with the seed to produce the only most rational perspective toward becoming the monster on Wall Street that any reasonably intelligent person can be.
Now spread your wings and summon fire…