I was at the very popular Obalende terminal, when a slim lady, probably in her mid- 20’s, walked past me in a jolting manner. She carried a rather heavy bag, almost resembling the size of a 25 liter jerry can and managed to lift the daunting weight through the crowd. Her movement was rhythmic, almost as though she was walking the runway at a fashion show, and the next minute the rhythm would stop and she would continue in that jolting manner. Again, she would drop the bag, sit on the luggage for a short while, and then continue with the journey.
I watched her from the entrance of the terminal to where she was, and observed in more detail how she carried the bag, looked around and continued in the same jolting manner. I almost could not predict what she was going to do next, as almost immediately, she screamed loudly at the bus driver who was beckoning at her to hurry up.
What actually caught my attention was the similarity her display had to the stock market. I almost could not predict what she would do next and this is typical of what you get when trying to forecast the stock market. Stocks are turbulent and unpredictable in nature and it would take careful research and analysis to understand some market trends.
I was with my colleague from work and as we made our way into the bus, I noticed how occupied the bus was, almost full, to its maximum capacity, and how everyone was trying to rush into it to get a seat. To give you a clearer understanding, this bus plied my daily travel routes, was notorious for having nearly damaged seats and the decent seats were the ones directly behind the bus driver. We had waited faithfully for thirty minutes for the bus to arrive and in that time had calculated our strategy on how to get the desired seat that was not damaged or broken.
This is where my investment management training comes to play. When the bus arrives, we don’t just board it. We must have calculated how to achieve our goal, which is similar to what an investment counselor would do when working with his clients. Short term goal is to get the seats behind the driver, so we can sit comfortably on the way home and talk about work. Our long term goal is to stay abreast with the industry working out strategies on how to dominate the market.
Why do we refer to dominating? Well, while we are both innovative, analytical, and risk tolerant we also have liabilities. Our liabilities? We are both short sighted and wear glasses and coincidentally we both need a change of lens, as it is not clear enough to spy out the bus at a far range to keep us on our marks. I also do not have a huge body frame to push people out of the way and neither does my colleague have a face to scare people away.
Since we are both constrained by this liability, we have come up with our own little plan to achieve our goal. What we have is our strategy and this is what would see us through. As with every investment, strategy is key. Yes we hear it all the time that ‘past performance is not an indicator of future success’. This quote shows up after any promo for investment advice, which means that the past really isn’t a good indicator for the future. This does not mean that you should not have a strategic plan. Remember, strategy remains the key!
Sometimes it’s not easy to analyze these things and some critics would say that sector rotation in the stock market is rigorous. They say some stocks would win in one week and lose the next week and consumer staples would win in another week. Truth is it’s a vicious cycle but then again, it’s probably because they haven’t really been to the bus stops to see the number of people with hungry and tired bellies waiting to get home. The traffic to get through is a topic for another day, and the random nature of buses that arrive at the terminal daily is another thing to reckon.
Sometimes I feel the bus that I have placed my stake on doesn’t come often enough. The buses pull in at random but cannot leave the terminal till their seats get filled up, maybe because they came in too early. This is the same as stocks, they cannot rise without a catalyst, so also the bus drivers cannot leave the terminal until their buses are filled up.
Sometimes there are erratic drivers who would pick up a few passengers and then leave the terminal to pass through strange routes to avoid traffic. Just as an upgrade or tip of from an influential analyst can spark a run off in the stock market.
Other times , there would be fairly sane drivers who would remain calm until their buses get filled up and would pass the mapped out routes, thereby making the bus’ destination obvious. Just when I think that I have perfected my analytical and prediction skills, the bus develops a flat tire and the driver does not have a spare one.
Haha, there goes my prediction skills, I didn’t see that one coming!
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