The intelligent investor

Hard times have indeed fallen on most of us, for some real and for others perceived. With the toughening economic conditions many a man has lost his job and is feeling the full impact of the recession. For others outside the US and the hard hit western economies there has been a huge erosion in the paper wealth they had in the local stock exchanges which has lately evaporated.

Millions who have lost their millions in the stock meltdowns across the world have till now been happy to see their investments grow with every new bull run, most of these people neither had the wisdom to understand the risks associated nor the courage to come out of the market when the going was good. It takes enormous amounts of luck to perfectly time the market and the best of 'punters' cannot, but it is this illusive dream that all our retail investors pursue, no wonder they are ones crying the loudest.

Most interestingly the disappeared money does not impact their lifestyle or standard of living much. Our average investor is just happy seeing his net worth go up every day. Except the US where they look for a reason to spend the rest of the world does not builds in this notional money into their household income.

So in essence their never was any money, we never had built the wealth created in the stock markets into our household cash flows and in real terms it does not impact us anyhow. The only thing the stock market was doing was telling us that we are now worth this much. Everybody was just happy to know they are rich and since they don't know that now they are sad.

But how does it matter.