I find the stock-market to be nauseous for the fact that, IMHO, the reason it goes up or holds is that people keep putting money into it through 401(AKA, the "Bulls"), and it goes back down or holds because people who are are not beholden to this formula - dare I say using their brain? - (AKA, the "Bears") offer a lower price for the stock. I've gotta think that some "Bears" or hedgefunds out there have to be making a lot of money in this vertical market simply based on buyer behavior.
Why be a genius, that's risky, when you can find a steady supply of lemmings to feed off of.
If you think my theory is nuts look your mutual fund statement. If the DOW was up and down, but ended where it started, but your mutual still consistently loses value month after month, then I'm thinking there is a good chance that my explanation for it is right. To me, this has been intuitively obvious for the past decade, but I've never gotten anyone to say they agree with me or state the same thing anywhere. They'll just look at it as "Oh, Joe, the manager of that mutual fund was doing a poor job." Well, yeah, that is immediately apparent. But, Joe may have been forced to invest, and if the fund is well-known, then Joe is even more forced to invest because so much money is coming at him. I could see a smaller, less-known mutual-fund doing better if they aren't forced to "buy the market", but can be more selective.
I'll even go so far as to state my own conspiracy theory, that the DOW, which seems to stay around 10,000 since anyone can remember, has to at least stay there just to attract more suckers into the market (can't kill the goose that lays the golden eggs). Or at least answer me this. If people keep putting their money into the stock-market, then why shouldn't it go up simply because people keep putting their money into it? The only explanation is if other people want out of it. Part of that should be due to churn from Bears who are making money and part of it should be that there is a backlog of people wanting to get out of the market, but only at a sensible price, and so they can't do it all at once.
