Stockmarket drop

If you didn’t go read that blog I linked to Monday yet, you should go do so now. It’s the most depressing thing you’ll read all day, but if you haven’t read it you won’t have any of the context for what I’m going to say next.  Reading that article for me was like when I first learned about the 2nd law of thermodynamics: the forces of the Universe are set against me, and there’s nothing I can do to stop them.  On one hand, it kind of sucks, but on the other hand it is somewhat comforting to realize that all those terrible things that happened to my money weren’t really my fault.  And perhaps if I think about it enough, I can come up with the generational equivalent of Gibbs Free Energy.  Or maybe the best response is to just become the generational equivalent of a geologist and be like “ooh shiny rocks” and not worry about mammon.

One thing that article did was start me thinking about investments again for the first time since everything went bad.  I remembered back to when I first started having money I could do things like invest with.  That was in the time Microsoft stock was doubling its price every other year or something.  The only thing I knew for sure was not to invest in Microsoft.  Somehow I knew the market was overblown, I just didn’t know what to do about it.  My stock broker called me a contrarian.  I would buy things that had recently tanked or startup companies nobody had heard of yet.  For some reason it’s easier to remember the good choices than the bad: I made some money on a dutch company that made voice recognition software and another place that made surgical robots.  I used my chemistry knowledge to make picks of international funds such as South Africa based on having an insanely high percentage of the world’s supply of platinum back when the hydrogen economy seemed to be a thing, and China in 2004 based on their surge in sulfuric acid production, a predictor of economic growth.  Later I felt bad about that because of that country’s record on copyright infringement, worker’s rights, and dumping benzene into rivers, so I sold at some point.  I sold all my good stocks at some point.  If I did anything wrong it was when I made the right picks ahead of everyone else I tended to dump them halfway before they got to their peak.  I just really didn’t trust the market that much.  I was a contrarian.  I was a rebellious investor, like the ones that were mentioned in that New York Times article.

The stock market doesn’t really encourage contrarians, I mean why would it?  It was hard to find a way of investing the way I figured things would happen.  I guess there’s something called shorting, but that seemed too risky in it’s own way.  It’s not that I thought things would suddenly go bad and then get better the next year.  I just thought they’d go bad at some point, I wasn’t about to predict when.  So maybe I should have bought gold.  I did buy gold, or at least as close as you can get to buying gold with a 401K: I bought shares of a gold fund.  And made quite a bit of money on it eventually.  But not enough.  When the shit hit the fan.  I mean when all of the shit hit the fan, 2008, there was nothing that made it through.  I looked at my funds and wondered how could this be possible: if the mutual funds are dropping more than 5% a day, why is the gold fund dropping too?  I had a diversified portfolio, what else was I to do?  Isn’t there something analogous to the first law of thermodynamics that should apply to money?  If it leaves one part of the economy, isn’t it supposed to show up elsewhere?  Well, as it turns out, the governing principle was more like the second law, but only if you were born in the 1960s or 70s. 

The thing is, I knew what was going to happen, I just didn’t know what to do about it.  There was nothing to do about it, short of buying lots of beer and recycling the bottles.  I saw lots of email spam some of my friends were passing along about how I could have made more money that way.  And judging by the graphs on that website I linked to, that’s essentially true.

So what’s the answer to this dilemma?  Invest like a 20 year old and work until I’m 80?  Might be worth a try, but something gives me the feeling that legislators won’t be doing anything to favor octogenarians in 40 years.  I’ll probably get canned whether I want to or not.  The answer is the same as it’s been all along: we’re fucked either way.  And maybe that means finding some other standard by which to measure ourselves instead of letting the Wall Street Journal do that for us.  And here’s where I’m supposed to step in and provide that solution, but I don’t know that it exists.  We’ve been fighting with each other about trivial things for the first 40 years of our lives, what makes us think we can unite around something now?  And if we did, the rest of the culture would likely turn against us anyways.  I suppose at the end of the day, the only answer I have is this: things are bad and they’ll just keep being bad and that’s the way it is, which is a smidgen better than things are bad and it’s all your fault.  So I suppose that’s a start.  Sorry for ruining your day.

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