The Economy Must Go Through Bad-Good before Becoming Good-Bad

Due to a recent mental illness, I have been following the stock market—the Dow Jones Industrial Average if you prefer to be precise.  Prior to following “the Dow,” I tried following my 40 pounds of cat around the house—which only led me to bump my head against chairs and the legs of various tables in my home.

When I say that “I have been following the stock market,” what I actually mean is that I try to see what number is affixed to the average (value) at the end of the day.  I once surfed the net all the way to Wiki to figure out what the average really meant.  I discovered that the stock average is determined by averaging the price of the stocks listed in the market (30 of them) and dividing that by something called “the divisor.”  The divisor sounds pretty nefarious to me—something akin to an Arnold Schwarzenegger movie character—but is in fact a construct intended to accounted for mergers, acquisitions, ice cream breaks, and some malfeasance.

Judging by the value of my stock portfolio, however, not all malfeasance has been ferreted out.

Anyhow, the average value of the 30 commonly-traded stocks and the divisor grapple on the market floor throughout the trading day.  A graph plots the gaudy mathematical actions.  At the end of each day the final number tells you about the over-all health of stocks and, in some respects, the economy.  To be honest, all I know is that a big number is good and a little number is bad.  The number for yesterday was 13,986.52.  That is a very good number.  Near as I can tell, the Dow reached 500 the year I was born.  Hula-hoops and big fenders on cars were popular then, too.

Probably, that is enough for me to know.

Part of my “following the market” involves watching well-dressed men and women on CNBC talk (argue) about the economy.  The market is divided into two sorts of people: bears and bulls.  Bears are nay-sayers and sellers and sitters on stocks.  Bulls surge ahead, invest in stocks, and are positive in their view.  CNBC has a mix of bears and bulls.  One fellow may like a particular government mandate on energy while the next woman decries it.  Government spending here may be good, while there it is considered bad.  One poor fellow pretty much says only “I like natural gas” every day.

The other day, I watched a stockbroker and a correspondent fiercely argue over a fraction of a percent on jobless claims.  We seem always bumping up against bad-good or good-bad in the economic indicators such as unemployment and gross domestic product.  I have yet to see anyone assure me of firm footing.      

Two days ago, however, one of the men on CNBC said that he did listen to the economists or pundits…he just worked hard and tried to do what he felt was correct in the stock market.  He said he never lost assets in the long run.  He suggested that hard work and honesty are always rewarded in the long haul.

If I could remember his name, I would follow him rather than the market.  Or I may go back to following my cats.

--Mitchell Hegman