Conor's avatar
$23.5m follower assets
Market Stupidity
Is it just me or has the market gotten dumber? Maybe it was a 10-year bull run that has clouded investors' minds, but I am kind of at a loss.

Inflation is everywhere you look. My Chipotle bowl (the same one I have been ordering for years) went from $10.00 a bowl in 2019 to most recently $14.00 a bowl. It doesn't take a rocket scientist to tell you inflation is up.

Instead of selling when inflation is high and buying when you think the Fed is going to reverse its stance (newsflash: they're not), why not judge stocks on a quarterly or even yearly basis?

The real answer is most of the money in the stock market is not buy-and-hold investors but traders.

Don't get sucked into the short-term mindset of trading macro events if you are an individual investor. Judge companies on their yearly performance and ignore the noise.
Lester Leong's avatar
This reminds me of that one research paper I read (totally have to find it) where they looked at investing in low book value stocks between a 1 to 5 year period. The highest results were from the 5 year period - but no one wants to hold for 5 years 🙃
Conor's avatar
@prometheus ridiculous. Inflation is definitely hurting companies bottom-line, but we have to be patient as investors. The same companies that will do good in bad times are the same ones that will do great in good times.
Joshua Simka's avatar
Nah, I doubt the market has gotten dumber. Maybe, with the passage of time, the stupidity out there in the market presents itself in new ways? If you read Ben Graham and early Buffett they were uncovering opportunity in corners of the market where dumb ran rampant!