In 1987 I was working for Microsoft, and had been for a year or so, and the stock market crashed while I was there. I was relatively young; I think I was 23 at the time, and as part of the hire process I'd been given a block of stock.
What was funny about that time was that someone had written an application which would sit on your computer and constantly track the stock price, and it was later expanded so that you could put in the number of shares you owned, and your option price, and it'd calculate your net worth hundreds of times a day. So that folks would watch the stock price and be very pleased when it went up a quarter or a dime, and you'd hear people hoot when the stock price went up.
But that changed on Black Monday. The stock market lost 22% of its market value in a SINGLE DAY. To put that into perspective, that's like the DJIA losing 2,640 points today. So the loss of 500 points day before yesterday is a pretty small echo of that single day.
But the effect on my co-workers who had this little application telling them their net worth (and in the minds of many, their value to society - it was that important to them!) was profound. They set up televisions in the cafeterias and in the conference rooms and on black monday, not much work was done. Lots of pale faces. Lots of worried people.
While everyone I know was worrying about the 4% drop, I spent the day bucking hay, and scalding and scraping a pig, and generally enjoying myself. I'd heard the news the market was dropping, and I really didn't care.
I don't care about the market because I fundamentally don't trust it. There's been too many insider trading scandals. Too many billions made by investment banks or hedge fund operators; by scandalous mortgage practices and by speculators. All of this moving money around and not much doing.
I invest in stuff that I understand. I understand land and real estate. I understand businesses -- some businesses, anyways -- and I understand people. So I work with that. What the market does is not really a part of my daily life, and I've intentionally distanced myself from it.
Because I learned, during that day in 1987, that if I pin my hopes to some random number that it can ruin my whole day, and I only work with things that I understand, and I'm much happier as a result.
4 days ago