The New Stock Market

So since I've gotten into personal finance more heavily, I've noticed a lot of people (radio, PF Blogs) talk about how crazy the stock market is. How it's constantly overreacting and how in the past it does this or that, but it's not doing that now.

First of all, if anyone should know this, I would think it would be people that dabble in the stock market: past performance does not guarantee future results. Why don't they get that? That should be obvious. I also heard once that the market is the collective knowledge of the world. That it's all of the investors, businesses, consumers, and anyone connected to anything related to economies and goods and services. If that's the case and it really is the collective knowledge of the world, then I would think that we would have to assume it's going to evolve.



It's the new stock market.

Maybe to me I just see the current market going the way of all media these days, everyone is hyper connected to everything. Everyone gets news instantly on their phones, through facebook, twitter, everywhere. Everyone hypes everything and everyone overreacts, to me it seems like Occam's razor. Financial institutions are so easy for everyone to access and make changes and trades at the click of a button. Because it's so easy people can react quicker and get more out of control quicker. I remember in the 90's growing up when I wanted to put some money away to save (yeah, I know I was a weird kid) I would have to mail in a check to my account telling them to buy $X of Y mutual fund or whatever. When it's that much of a hassle to make a trade or sell stocks then people are more inclined to hold tight.

When I started this blog I didn't think I would be inclined to talk about the stock market, I figured I was too much of a "rookie" and didn't want to get into a debate on something I didn't know. But hey, this is my blog, it's my viewpoint, if you don't agree with it tell me why and maybe you might change my viewpoint. Like I said, I'm still a "rookie" or at least I feel like I should be.

Investing styles

Now there are traditional investing styles out there, growth, value, dividend, those guys who are always trying to catch a falling knife.... I don't know why no one has ever really mentioned this before, and if they have (which I wouldn't doubt) but I haven't heard about it at least, is social investing, or investing based on social perceptions. I think that the social perception of a company can make or break it (sometimes, also be careful that you are not just getting sucked into hype). That's how I picked Tesla, which I don't doubt will probably be my best stock pick in my life but that's another story, I just wish I had more money at the time. Anyways, I liked the goal of that company and I liked the way people thought it was a sexy car. Also, all futuristic movies have electric cars. Anyways, I guess my point that I need to circle back around to is that the public likes their cars. The financial markets avoided Tesla like the plague, but the public was in awe of them, I saw this as opportunity, because the general public is a much bigger audience then the stock pickers who write reviews on how the company will fail or that it's overpriced or plenty of other reasons, but the one thing no one has ever said is "that car sucks" because quite honestly it's a damn nice car. I bought it based on the social perception. That's my new investing style because I think that the market reacts highly to social media outlets. (though I do freely admit I was lucky on this one)

Another new type of company I want to invest in because of where I think it can go in the future if 3D printing companies. I think I may have already missed the party on this one but the possibilities of these printers are pretty amazing.

It's a new market out there, things won't be the same now that everyday people (myself included) can go out and pretend they are savvy investors based on what they heard on the news last night or saw in a club in Las Vegas.

-Zee

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