Soothsayers

Back in the day, in the 80s, when I started making a little money, I studied those knuckleheads who analyzed the stock market through graphs.

These are the same knuckleheads who exist today. They’ll never go away.

They call themselves technical analysts.

They give you the impression that they have the stock market all figured out.

They point to a pattern like a double landing, give it a crazy name like a double dead cat bounce or something stupid like that and from there predict the impending stock market boom.

I looked at many of these books.

I spent so much time examining these books I gave myself a clot in my left lower calf because I didn’t get out of the chair.

That was a big mistake.

What wasn’t a mistake was that I began asking myself questions.

After I looked at these books, I engineered a simple question: Can anyone see the future accurately?

The answer is no.

Nobody can predict the future.

Nobody ever has predicted the future. They have only gotten lucky from time to time.

These technical analysts look good because they analyze past events. They already know what the future is because it’s already happened.

The other way these guys look good is by spreading their risk.

What do I mean by that?

I’m going to tell you a story to illustrate.

I was born in 1954.

In 1963 John Kennedy was assassinated.

After he was assassinated there were all sorts of people who claimed to have predicted his assassination.

One of these persons was a lady named Jean Dixon who was a very popular horoscope reader at the time.

Well, I was only 10 or 11 years old at the time, and fairly naïve, so I was super impressed with this lady when she said that she had predicted JFK‘s assassination.

I ran up to my dad and said: Dad, this lady predicted JFK‘s assassination. This is absolutely amazing.

I was wondering what special powers she must have had.

My dad who was a curmudgeon of sorts, and a man not likely to humor fools, looked at me and said: It’s easy when you predict everything under the sun.

And there you have it.

How can these forecasters on Wall Street possibly be wrong when they predict everything that can possibly happen?

They can’t.

Which is why they predict everything under the sun.

They have to because no one can predict the future.

That includes you.

The future entails risk, so whenever you invest in the market, you undertake that risk. That’s part of the reality of life. There are no sure things.

Because there are no sure things, because foresight is never 20/20, you must temper your enthusiasm for whatever product you are investing in.

I would never recommend that you bet the ranch on one stock or one investment.

Bet only what you can afford to lose, then forget it. Never look back unless there are some amazing circumstances that you didn’t realize.

But if you do back out, back out forever. And never look back.

Most of all, understand that no one can predict the future.

No one.

Don’t give these technical analysts one minute of your time. You will just be fooling yourself.

Sincerely,

Archer Crosley

Copyright 2021 Archer Crosley All Rights Reserved

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