Mining and other stocks up and down: Take it like a man

We reminisced about the many times in our rather long lives that markets have gone up and then come down.  Too many to count on the fingers of one hand.  We compared notes on fortunes made and lost through no effort or bad decisions on our part.  We agreed that maybe we had not been smart enough to predict changes then; or to predict changes now.  We agreed it is all a matter of too many things thought & done by too many people.  As an article on Mining.com has it:

The coverage preceding Bernanke’s speech underscores how easy it is for journalists to zero in on a correlation and run with it as causation.  But, because movements in the stock market result from trillions of calculations about future prospects for the economy and for individual companies, most of these unknowable, it is impossible to come up with a solid proof of what the collective psychology is at any one moment.

The seventy-something fellow’s main point however: there are billions of people out there who all want to make a dollar more today than they made yesterday, and they are all working hard to do so.   I noted that many of these billions are in China, and he concurred that the fear is that the Chinese economy is overheated, bubbling along too merrily.  But we consoled ourselves by agreeing that the Chinese politicians are so afraid of social unrest, and even rebellion, that they will do almost anything to keep the economy growing.

Then there are the other “calculations” including the Greeks who seem not to want to make another dollar more tomorrow than today—or at least not pay it in taxes.  Or the Mongolians who renege on contracts and demand more money from mines in their land.  Or the vote on Pebble that might go any which way and kill or promote the mine.  Or the inability of American politicians to be civil to each other, net alone govern, but who do have millions to spend denying civil liberties to the different (read defence of marriage legal fees or Obama dithering about what he thinks.)

It seems facile to blame it all on soccer moms who are not spending at Target as much as they used to, or companies that really do not want to hire until after the 2012 US election.   Or the Germans who do not want to bail out the Greeks.

I read the analysts who are now blaming economic conditions on the rise in the gold price; as one commenter puts it: “Central bankers have long been embarrassed by the price of gold, which exposes their surreptitious currency debasement.”  Can’t have it both ways guys.

As the seventy-something fellow put it:  keep buying; revel in gains; take losses like a man; and never forget we have seen far worse before.  Just because the young have no memory, have no hard knocks behind them, or were brought up to believe in an ever-increasing future, is no reason to funk, panic, or dump stock in good companies.  Just because journalists, who are generally even younger, fix on single causes, or write erudite analyses, is no reason to lose your investment senses and dump quality stock.

Of course the old fellow is rich and is but playing now.  Investment gains and losses to him are no more than a diversion.  It matters not at the end of a snooze which way the markets have gone while he slept.  The house is long-since paid for; the kids educated; the nest-eggs secure; the future not much to worry about.   And the rantings of those under sixty of no merit worthy of respect.   As for the doings and non-doings of politicians,  in the past sixty to seventy years we have seen better and we have seen worse.  In the end they all get thrown out and somebody else comes in to try.  In the final analysis it is hard to see that many have had a significant impact—they too float on the desire of billions and trillions to work and earn a few more dollars tomorrow than today.   And from what we can see the Asian and emerging-country economies are doing rather nicely.

Let us hope they continue to do it while we continue to invest.   Or if you are over sixty and do not have a good nest egg, then all we can say is continue working at a job where they let you snooze after lunch.