How are people and the stock market similar?

It seems like the title of this article was written by a retired philosopher in Vienna who happened to be a stockbroker in London.

As a rookie who has just started learning about the stock market and finance, me writing this blog is like that nerd friend who arrives three hours early wearing casual clothes at a themed party. 

But, I’m beginning to know about it, and here I’m with my thought comparing the stock market to people. 

I’m a thinker and a writer, so when I started to study the stock market a little bit, my mind found a correlation between the market and people. 

The stock market represents a category of people. What people? Let’s see. 

Stable or unstable 

Like stock, some people are also more stable than others; some give more returns, some drown you. 

Stable stocks are like a big fat chicken burrito. They give constant satisfying returns, and others are like new burgers of McDonald’s; no matter the variety, there’s always going to be a disappointment (now I feel weird comparing stocks, food and people).

Others are like penny stocks. It might eventually grow if given enough time and trust or just like that drunk friend who thinks they can walk straight by the side of a swimming pool after ten shots, they’ll take you down with them. 

Some are high on emotions (volatility). Their life changes every minute according to their mood. One day they are up; another day, they are down. Some don’t fluctuate much and continue to grow. They are not driven by emotions but by goals, ambitions and self-improvement.

If you’re a fan of drama in life, being with highly volatile person would be no less than stressful entertainment. Of course, you’ll always have some comedy or tragedy going on, and life will be blissful.

But if you don’t like drama and are a fan of living in a cave with aesthetic walls, hot chocolate every evening, and artsy Instagram stories, you’re more inclined towards stability. 

Long term > short term 

So, as with any stock, it’s never linear growth over a long time. Some years are good, and others are not. But if you combine them, you’ll notice a significant shift. 

So, let’s say 2021 was a good and stable growth year for you; in 2020, you lost all your life savings in crypto and started to live on granola bars.

In 2019 you stayed inside because of a pandemic; in 2018, you changed cities because that relationship seemed oh-so-beautiful and in 2017 was again more of a stable year with one and lots of growth. So, this is how those five years will look on a chart (which I drew btw).

So as we can see that life tends to balance itself out.

Just like stocks, people grow and fall. But eventually, most of the people stay stable. The volatile ones are risky and more rewarding, but at the same time, they can drown just as fast.

The analysis 

If you know anything about analysis (Idk much about it, too), it requires a lot of past records, data and history. Maybe.

So the essential point is this, always zoom out and analyse. You won’t get a good picture if you see the stock performance during the last week or a month. 

You never buy a stock observing its previous week performance. You always see the last 5+ years performance, which gives a better view. (look at me giving advice and being the Wolf of Dalal Street) 

When you dissect your life year by year, things start to change, and you see your patterns. Upward going or downwards. 

Out of control stuff 

Your intuitions and predictions works to a certain extent only. After that it’s like paragliding, you hope to stay alive and not to land in the bushes with your ass first (yup, that’s how I landed).

In the stock market too, there is only so much that you can do to take your growth higher, but some things are out of control. Some are just pure luck.

When you start talking to them, every person you meet is like taking a risk dive in to them without knowing much. They can make your life full of stuffed bear toys or like a burnt barbie doll who couldn’t handle a hair curler. 

Conclusion and some Fast and Furious bashing 

You might stay invested in the people for the long term, or you withdraw and demand your time back just like after watching Fast and Furious 7. 

As you connect with more people, you get to know the person’s volatility and stability. 

You slowly start to understand their reactions to different situations. Some are good, and others, eh, not so much. 

So just like anything in life, here you go through a lot of trial and error. Either it’s putting money in the ‘right‘ stock or choosing the ‘perfect‘ partner. 

It’ll never be right and perfect in the first go unless god comes and hold your hand, showing you the right path. In which case, atheists will never buy good stocks and find a good enough partner. 

And on that note, if you think a little, you can see a correlation between the two. To experience more is to know more, be it with people or money. 

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