Somewhere along the way, a large majority of U.S. citizens convinced themselves that the market owes them something. They think that if they “invest” in the stock market, they’ve somehow earned the right to make money over time.
I’m not sure if this belief comes from the financial advisors feeding them self-serving garbage based on their tiny sample sizes.
It could also possibly come from the financial media, which constantly makes their viewers feel stupid for missing out on a trade or a long-term trend.
These vultures use headlines like, “If you had invested $10,000 in X on this specific date you would have easily earned Y in that short period of time.”
They’re proving to us how worthless they are. It’s poison.
At what point do investors hold themselves accountable? It’s never their fault for losing money. It’s the Fed’s fault, it’s Trump’s fault, it’s my neighbors fault who “made” me buy bitcoin.
It’s your fault if you lose money. We have no one to blame but ourselves if our “investment” account loses 10%, 20%, 50% or even much worse in the case of things like cryptocurrencies, precious metals, or IPOs like Snapchat.
“But J.C., you need to empathize with people who don’t have your knowledge and experience or who can’t afford someone who does.”
Fine, so because someone is ignorant and foolishly convinces themselves that the market somehow owes them something, we’re supposed to feel bad?
The head of a family is so irresponsible that he or she enters the marketplace with absolutely zero risk-management procedures in place, so we’re supposed to do what?
Give them their money back? Blame the Federal Reserve? Yell obscenities about the President? Troll people you see on TV over the internet?
This is something I think about a lot, especially since early October while we’ve been huge advocates of raising cash and shorting stocks (“Why Cash Is a Great Position,” Dec. 10; and “Cash Is (Still) King,” Dec. 21, Breakout Profits).
Did I hope the market crashed? Yes, absolutely. Should I feel bad about it? I did, to a certain extent. But is that right? Should I really feel guilty for hoping the market crashes if me and all my clients are short stocks?
I feel like I should want the market to crash. Anything else makes no sense at all. If we’re positioned for lower stock prices, hoping for any outcome other than lower stock prices is borderline insanity.
I’m not sure where others’ self-entitlement started. People actually believe that the market owes them something.
Like they’ve been born into this royalty sort of scenario where you just stick money into this stock market vending machine and it magically spits out returns.
When you take a step back and really think about it, this thought process is psychotic.
“Yes J.C., but since 1950 the market has returned……blah blah blah”
Does the margin clerk care what happened in 1974? No. If you have a margin call and you don’t meet it, you’re getting your face pounded in. And you know what? I’m rooting for it. You earned it.
“J.C., you’re such an asshole. Why do you wish bad things upon people?”
I don’t. I consider myself to be a very good person. I would never hurt anyone. If you know me personally, you already know that.
But this is Wall Street, not Sesame Street. If we’re short stocks, we want 1987 tomorrow!
What’s wrong with that? Does it make us bad people? Absolutely not!
From my seat, the bad people are the ones going out of their way convincing others that the market is this magical place of risk-free 8% returns for a lifetime.
To me, the bad people are members of the media sensationalizing every “news” event with ridiculous headlines.
The bad people are the heads of the households putting on way too much risk that they cannot afford to put on just because they’re greedy.
“J.C., you can’t expect people to know as much about the market as a professional. You’ve been at this a long time!”
Fine, then don’t get into the market. Who the hell told you that you should? You’re an idiot for believing them.
Would You Do Brain Surgery?
The stock market is the only place where people think they can just walk in and succeed without any sort of preparation whatsoever.
Would you perform brain surgery on your family members because people on TV spend every day telling you that you can?
Would you put your family on a plane and fly them across the country because some “financial advisor” said it was OK because people have been doing it successfully since 1950, or 1926 or 1980 or whatever self-serving date they decide to cherry-pick to make you feel stupid?
First of all, no, you would never do these things.
Second, the laws in this country would not allow you to do it anyway.
There’s no chance that a hospital would let you perform any kind of surgery without proper training, which in this case includes a decade of medical school and near-impossible requirements to get into schools and exams to pass.
Airlines and air traffic control regulations prohibit anyone without the right training to even get into the pilot’s seat.
Why on earth should it be any different in the market?
The market is the only place where there are billions of dollars spent every day trying to convince you that, yes, you can perform that surgery and. yes, you can fly that plane.
Not only can you do it, we’ll give you your first 50 trades for free! We’ll make it soooo easy for you to open an account and start slinging futures and options. “You’d be a fool not to do it.”
The brokerages, the attorneys, the advisors, the technology companies, the ETF companies, the regulators, and an endless supply of vendors have all pulled together to convince you that, yes, you can! You should! And you owe it to yourself and your family to get in now, before it’s too late.
“Wait, have I told you about compound interest? OMG it’s amazing. Let me show you a chart of what it would look like if you had invested X dollars on this very specific and completely arbitrary date.”
The brainwashing stems from a variety of players, and it’s not healthy. It’s irresponsible.
And I’m supposed to feel guilty for wanting stocks to fall because we’re betting that stocks will fall?
Take responsibility for yourself. It’s your money. You earned it. If you’ve saved a bunch of cash and you take it all to Vegas and started playing roulette and you lose it all, should I feel bad for you?
Why is it any different in the market?
Am I wrong?
Let me know, and let’s keep the conversation going: email@example.com.