For Every Solution there is another Problem

For Every Solution there is another Problem

It is inherent in the nature of the markets that every solution to the problem creates a new problem.

Albert Peter Pacelli

The Stock market is a social, multi-faceted and self-correcting phenomenon. If we as individuals create our own reality, then the stock market is the product of millions and millions of thought forms all flowing together forming a river of energy that could go anywhere. It is folly to try to predict the direction it might take but that doesn’t stop people from trying. Investors, traders, momentum players, quants, academics, hedge funds, you name it, have all tried their hand at developing strategies to take money out of the market. And for awhile some do it but then they give it back. As soon as someone solves the problem of the market; the market adjusts and changes, creating new problems.This is the discounting nature of the marketplace in action. To discount is to take into account in advance and so lessen any effect thereof.

The markets continually change so that no formulated solution can beat them. Instead it makes more sense to ignore the market and focus on investing in individual companies that are investing in themselves. Its more boring than trying to predict the direction of the market but in the long run it is far more profitable. People forget that the original intention of the stock market was to allow people to invest in companies providing their management teams with seed money to develop and grow their businesses.

But human nature, being what it is, people will continue in their attempts to forecast what can't be forecast, but that is how the market teaches you, if you are willing to listen. If you aren't interested in learning these lessons, you will be continue to lose your money in the market which is unfortunate because the object of the game is to stay in the game. If you manage to stay in the game, making money will generally look after itself.