Is the Stock Market One Big Casino?
By Wally Waxman
We look at the closing prices of stocks and wonder to ourselves if any of it makes sense. Some days stock prices are higher, other days they're lower. Without warning your 401k is slashed in half. Once upon a time your 401k might have ballooned to heights previously unimagined. It all seems so random, so chaotic. And the truth of the matter is that the stock market is like a manic depressive person.
One day you might wake up to discover the Ms. Market has forgotten to take her mood equalizer pills and offers you companies that are worth $100 per share for only $50 per share. It works in reverse sometimes, too. Ms. Market may be especially giddy one day and offer you companies that are worth virtually nothing for hundreds of dollars per share. That's the way the market operates. There are no guarantees. Only invest what you can afford to lose. Incredibly, people regularly speak about the stock market as though it were a machine that produced consistent returns year in, and year out.
What nobody will tell you is that the stock market is like one giant casino. It's true, you're owning share in a real company. You are purchasing an asset. However, the overwhelming majority of people who are involved in the stock market see it merely as a place to make a quick buck. They will attempt to turn a profit when the market pops and will attempt to steer clear when it drops.
My point is this. You better know what you're doing if you're investing your hard earned money in the stock market -- or you could wake up one day feeling cold and broke.
Did you know that Warren Buffett compounded money at an annual rate of 29.5 percent for over thirteen years? That's an amazing feat that few have ever come close to accomplishing. So the question we ask ourselves is very simple: how did he do it? Please click on this link and see for yourself why Buffett is the undisputed king of radical out-side-the-box investment strategy.
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