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To Buy a Fat Pig


I've been doing some research on "the" stock market, i.e., publicly traded shares of corporate ownership. A few thoughts:

It's an "everybody knows" that fear drives the market. But that's not quite right and pretty much backwards. Rather, It's confidence that drives the market, along with its obvious corollary, and the lack thereof.

Confidence is an interesting subject all on its own. Peculiarly it's not rooted in actuality or even truth. Ask any con man. It's just believing in something or someone.

When it comes to having confidence that a corporation will continue to be viable and return a profit there are several areas to consider. Chief among these is confidence in a company's CEO. Perhaps the best exemplar of this could currently be Elon Musk, fearless leader of Tesla Corp. His "Think Big" insouciance and managing to remain prominent in the public eye has much to do with the billions spent to finance his operations. If something were to knock him off that position the market would sadly respond in kind.

Confidence can also be recursive, trusting that another or others have confidence even if you don't. At this time, the most powerful world leader politically, can politely be described as a loose cannon. With a history of underhanded and secretive dealings, uncanny bravado, litigating debts and bankruptcies, it's difficult to believe that any of it could inspire confidence. Yet the stock market has not suffered (yet) because of this leader which I have not bothered to name. Obviously, by whatever means, a lot of confidence has been won.

Moral virtues are not bound here. But certainly they can be. For instance, I would not personally invest in a company that uses slave labor, however successful they might be. But while I don't condone sugar-water drinks (soda pop) I do own some shares of Coca Cola Company — they are a solid, well-established company which pays a good dividend. So why not?

In looking towards potential investments, nothing can inspire confidence more than long-term rising graphs of production and profits. But keep in mind, these would be different than the market graphs (NYSE, NASDAQ, etc.) that only depict the up and down slides of public confidence and various activities of profiteering. It's best to keep in mind that, while an uptrending market graph is generally a good sign, it is also, to the company itself, an increase in debt.

So, like it or not, it's a confidence game. Best to be smart and alert if you're going to play it.

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