“Erghhh…it’s fucking tiring losing money, thank God it’s Friday”
“Yeah, I’ve not heard about anyone that killed it this week”
This was the conversation I overheard heard between two colleagues as I was walking out of the office on Friday evening. Of course they were talking about this:
The ‘market’ was fully expecting Mario Draghi to deliver more than he did on Thursday. The markets disappointment led to the above significant strengthening of the Euro, the 4th largest one day move in the EURUSD ever seen.
Many of the market participants that I spoke to were expecting Señor Draghi to ‘do’ what was already priced in and then a little more…just to please the market. They wanted an expansion to the ECBs EUR60bn per month quantitative easing and didn’t get it.
Observing this action at close quarters it struck me how much emphasis in the investment world gets placed on expectations, rumour and second guessing instead of cold hard facts.
I guess the defence would be that efficient market theory prices in all of the facts so the only way to make money is to try to second guess and predict future facts. However this in itself makes the market less efficient again.
Amongst all of the doom and gloom at work I barely thought to check my equity portfolio. When I did there was nothing to cause concern. Thats the beauty about focussing on real economics (assets, cash flows and profits) as opposed to speculation and second guessing.
The other point to note here is that the guy who gave the quote above technically had it wrong:
“…it’s fucking tiring losing other peoples money”
…would have been a much more accurate statement about his week!
“When I did there was nothing to cause concern.” I’m with you on this. I ‘lost’ exactly £5,780 from my own wealth this week thanks to Mr Market and slept very soundly last night. That’s because I acknowledge that markets go up and down like a … I only have to look at my monthly performance where I added £11,689 (some of which was new money admittedly) for Exhibit A.
RIT,
£11k is a tidy addition! The problem for the guys and gals that actively trade the markets (as opposed to investing) is that every surge/dive in the graph is an opportunity lost or a stab in the guts if they are the wrong side of the slope.
I find speculation itself tiring! Too much guessing how an insanely complex system is going to react based on, what is really, limited data/knowledge. My ‘index’ investing approach is really applied laziness 🙂
Get out on that fixie. That will cheer you up. Glad you haven’t cashed in your UTMT chips
The Rhino,
I’m perfectly happy…it’s the others at work that aren’t/weren’t. While me weekend rides have ceased to exist I’m still riding the fixie daily to the station and back, averaging around 25km per day which keeps me ticking over 😉