D.F.

Krause

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October 27, 2008

My Schizophrenic Friend The Market

I think my friend is schizophrenic. The way he keeps changing his demeanor, he can’t possibly be operating with only one personality. I’m telling you, it’s like a convention in there.

My friend’s name is The Market. He’s always been a little out there, but the past couple of weeks, he’s really gone off the deep end. He’s up! He’s down! His hair is disheveled! I don’t even want to talk about the entire afternoon he insisted on being called Beezus. It was just weird.

The Market is going through a rough time. I get that. He’s not sure what his future holds. I’ve known lots of people in that situation – I’ve been there myself – but I’ve never seen anyone react to the uncertainty quite like The Market is doing.

“Today I’m selling everything, D.F.! Everything! Sell! Sell! Sell!”

“Are you really sure you need to sell everything? Isn’t that a little drastic?”

“D.F., they didn’t pass the bailout! We’re all going to be living in cardboard boxes by the end of next week! I need cash so I can get curtains to put in mine! Sell!”

“Wait a minute. Don’t you Wall Street types always tell everyone that investing is a long-term proposition, and that you’re not supposed to get too freaked out by the momentary ups and downs of the market?”

“No one really means that!”

“Apparently not. So what are you going to do? Horde cash? I guess banks are out, eh?”

“Totally out! They’re all going to fail! I’m trying to decide which pillowcase I can take out of the rotation and use to stuff my cash in.”

“Hey Market! Did you see? They passed the bailout and they’re going to flood the banks with cash!”

“Did I! Buy, buy, buy! It’s the time to be in stocks. Invest your money like never before. With the market down like this, share prices are low and it’s the perfect time to get in!”

“But what happened to all your concern about the market crashing? Just because they finally passed the bailout doesn’t mean it’s necessarily going to work.”

“Buy low, sell high, I always say!”

“Then why do you people always start selling when other people start selling and the market is going down?”

“Because what I say is one thing. What I do is another thing entirely. Words of wisdom sound good, but when it comes right down to it, the only rational action is complete and utter panic.”

“Well, I never knew any of this. No wonder I don’t make money in stocks.”

“D.F.! Did you hear? Dana Perino! She said the third-quarter GDP numbers are going to be ugly!”

“Unlike Dana Perino.”

“Yeah, she’s pretty cute. Hey! Don’t interrupt my panic with your wisecracks, D.F.! The economy is tanking! I need to sell! Sell! Get out now! Take my cash and stash it somewhere!”

“Back in that same pillowcase you were using the other day?”

“Are you kidding me? What I have left could fit in a condom. But it would get all ooey . . .”

“OK, I don’t think that’s an image I need. So you’re getting out again, eh?”

“Getting out. It’s too volatile. Too uncertain. I can’t ride it out. I just can’t. Plus, if Obama gets in, I hear he’s coming after hedge fund managers. At least 19 of my personalities are hedge fund managers! I’m screwed!”

“I can see where that would be a problem. Well, Market, you gotta do what you gotta do. I guess your investing days are behind you.”

“Oh, hey, D.F., look! There’s Alan Greenspan talking on TV. I wonder if this is a good time to look at oil futures . . .”

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