Stock Markets Climb a Wall of Worry

Twitter is very interesting.  It is also educational.  I probably learn more from this social media platform than any other.

I follow a certain person on Twitter.  His name is Conor Sen.

Recently, the aforesaid Conor Sen, was mentioned in The Atlantic for a tweet in which he said this, “If the world is falling apart, then why does the stock market keep rising?” A good question.  There is plenty of bad news out there.  Things seem to be falling apart.  “The centre cannot hold.”  (W.B. Yeats).  And yet, the market keeps rising.  Only today, a certain person with whom I work from time to time sat down and exclaimed with some surprise, “I made $30,000 yesterday!” (on his IBM stock; he is retired).

I read The Atlantic article in which Mr. Sen was mentioned.  You can read it too.  It is entitled, “Why Does the Stock Market Keep Going Up?”  Their 3 explanations were interesting, obvious.

As for me, when I read Mr. Sen’s Twitter post, one and only one statement came to mind to answer his question, “If the world is falling apart then why does the stock market keep rising?”  My thought is not new yet it is not quoted all that often by the younger generation.  Still, it’s entirely relevant.  And here it is:  “The stock market climbs a wall of worry.”  This is a statement that apparently originated some decades ago. What does it mean?

I’ll suggest to you what this old proverb means.   It’s a bit strange and a bit ironic.

When people, i.e. the masses, the majority, the bourgeois, the iconic “you” and “me” are worried, we generally stay out of the market, or at least refrain from much activity in the market.   We’re afraid.  If anything, we invest in what is safe.  Bonds?  Sure.  Real estate? Sure.  But here’s the thing:  someone out there is not afraid.  Someone out there sees an opportunity and is not afraid to take the risk.  They dive in and they dive in big.  Who is this someone?  I’ll leave that to your imagination, although I’ll suggest who one of the someone’s might be:  corporations.  In times like these, when “markets climb a wall of worry”, one of the biggest buyers on Wall Street is none other than corporations buying back their own stock shares.  Fewer shares on the market.  Precious as gold and diamonds.

All of the above has a contrarian air to it.  But, then again, there is no successful businessman who wasn’t at least a bit contrarian.  You have to go against the grain.  You have to climb the wall of worry





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