Because I’m well-informed, I have no idea how the stock market actually works. Now, if you’ve continued reading after that sentence, you’re either as well-informed as I am, a cocky investor who’s just waiting to prove all my points wrong, or you’ve had such a boring day that reading a blog post about the stock market is the only thing standing between you and a coma.
However, I do have a confession to make: I do have some idea of how the stock market works. That said, I’ve derived the bulk of my knowledge from reading Jordan Belfort’s books, reading about 20 pages of Investing for Dummies, then promptly forgetting everything in those books that had to do with the stock market.
All in all, it was a fairly efficient learning system. I don’t really regret not knowing anything, although I do have moments where I wonder what would have happened if I’d spent all that time trying to learn why there aren’t more girls at heavy metal concerts (truth: turns out girls don’t like sweaty guys growling at them, especially while on stage).
In my defense, investing never appealed to me, largely for two reasons: investment commercials and something else I don’t remember.
When I’d watch football games, in between the ads that tried to make me an alcoholic and the ads that tried to get me to buy a pickup truck the size of a small office building, I’d see a few investing commercials. Most of these involved shots of large buildings and people in suits smiling and/or looking at a computer screen and pointing. At face value, that doesn’t sound so bad. After all, I’m remarkably talented at looking at buildings and at pointing to things (especially computer screens).
It wouldn’t have been a problem, but then the voice-over would start saying things like, “Your mutual funds can immature tangentially once the verified security algorithm manifests itself into a stockbroker who thinks he is a wombat. Investing is easy.” Maybe that’s not exactly what was said, but it’s much more relatable.
Ultimately, all of those commercials made a little less sense than Finnegan’s Wake. Now, if you’ve never heard of Finnegan’s Wake, it’s a series of words printed on pages in binding, so it technically qualifies as a book (sort of how Lifetime movies technically count as movies). If you jammed a railroad spike through a gorilla’s head, placed its hand on a computer keyboard, then strategically administered electric shocks via a nearby transformer, the resulting gibberish would not only make more sense than Finnegan’s Wake, it would be far more entertaining.
DISCLAIMER: Don’t actually jam a railroad spike into a gorilla’s skull. It won’t look good on your resume. And also don’t read Finnegan’s Wake. But I’m going to link to it anyway to test your resolve.
So, back to investing. Because I don’t know much about the stock market, I’ve done extensive research and have compiled a crash course on the stock market (apparently it’s not a good idea to say “crash” and “stock market” in the same sentence. But I like to live dangerously).
A typical day at the stock exchange, which is a giant room that looks like something a James Bond villain would buy on a budget, involves the following:
- Lots of squiggly lines going across screens.
- People talking on phones because of squiggly lines.
- People yelling at each other because of squiggly lines.
- People throwing a lot of paper on the floor and yelling on the phones because of the squiggly lines.
- There’s a bell. And it rings. It is the god of squiggly lines.
Now that we’ve got that covered, we can get into buying stocks. The whole idea of buying stocks is pretty complicated. Basically (see what I did there?), you buy part of a company, but not a real part. A pretend part. Then you keep that pretend part for a really long time, in theory. In reality, you buy stock, and the value immediately plummets, so you go off to a casino where things are a little more understandable.
But I don’t want to put the whole enterprise down. There are plenty of people out there who make tons of money off of the stock market. They use a really simple strategy: spend about 100 hours a week reading about companies (in your copious free time), then buy some stock and wait 80 years. If you think that isn’t possible, just ask Warren Buffet. Since you’ll never be as good as Warren Buffet, there really isn’t much point to trying in the first place. Also, since you’re not Warren Buffet, you might as well do something useful with your life, like chasing weasels with a plunger.
I realize this wasn’t really a crash course. But if you thought after the first sentence in this post that I had anything valuable to offer on the subject, I also have lots of pretend company parts to sell you.
Thanks for your highly informative post on stocks! After reading it I went out and got a railroad Spike and a plunger. Now to find the gorilla and that weasel. Odd, now i want a cup of coffee…
Jhilmil Kochar says
In the same boat, i know as much about stocks as I know about astrophysics. Hilarious.
I’d be willing to bet you know more about astrophysics and stocks than I do. I’m somehow worse at astrophysics (and regular physics, for that matter).