PICTURESQUE Wade B. Cook
STOCK MARKET AND POLITICS
I've never attempted to write what I'm about to write. I use metaphors from time to time, but I'm not that good at them. I'm a little out in left field, metaphorically speaking.
I would like to draw a picture for you. This is not that tough because I'm going to use a picture as the subject matter, and try to make this whole process picturesque. There will be four components and we can learn lessons from each one of them, but the main lesson I hope to convey is that what we see, what we understand is all part of something else, something bigger. And this something else has a part in determining the direction of each of these components. This idea is sort of a, "No man is an island," to use another metaphor.
I'm sure you've seen a picture of a fox hunt, probably in jolly ‘ol England. The hunters are adorned in their red coats and their riding helmets. The fox has taken off and the dogs lead out. The hunters jump hedges and streams which somehow the dogs get through. Okay, do you have that picture in mind? Focus in on the horses jumping the hedges.
Now, in your mind back off a little and you'll see more countryside. Trees in the distance. A farmhouse off to the left. The fox has skedaddled off over the next rise. Now, look some more and you'll see the skies, the clouds and the wind blowing. This artist is good. It's a blustery day, a good day to be up on a tall warm-blood. It's synergy in motion.
Now, consider your own life, your history, and the scenes you've seen and you'll realize what you see, what you think about and what you feel is an integral part of how you see this picture. Let's come back to the American Stock Market. You are chasing the fox. The blood hounds are out. You're ready for the adventure. You look hard and realize your viewpoint is part of something bigger.
1. You're looking at a specific company. Will it come out with good earnings? Will it disappoint? Will it be the right investment for you?
2. This company, this stock is part of a major industry which is really growing. The company should do well.
3. But the economy is in the doldrums. The earnings are good, but all these stock seem stuck.
4. News keeps coming out about the European debt crisis. Greece is about to go under. China is having major difficulties with Capitalism in a Communist country.
How can debt in Italy or Greece, and the housing market here, and our new trade numbers with China, and the threat of new taxes, affect your little "Micro-Chip" stock? Because it's a part of the whole. The components effect the larger picture and the larger picture affects your small company.
Think how inter-connected everything is. A small computer chip company in Southern Idaho, doing business in the computer industry with its rapidly advancing changes; struggling to make it in America, within an economy which has strengths and weaknesses; all transpiring on the back canvas of the world stage. It is mind boggling and very exciting as we try to make sense of it and figure out how to trade and where to invest.
© 2015 Wade B. Cook. All Rights Reserved. Parts of this article were published in 2010. Not much has changed. Visit Wade at wadecook.org.