Stock Market Proverbs Part 3: The Essence
For the final installment of the stock market proverbs series that began two posts ago, I have collected proverbs regarding the essence of the market.
Please see below for Parts 1 and 2.
“Give away the head and the tail.”
The head is the peak and the tail is the bottom; it is desirable to have a solid strategy rather than aiming for those. Aiming for a big score is usually just digging your own grave.
“Ask the market about the market.”
To read the market, you must discard your preconceptions. If you observe market movements closely, there is always something that will become visible.
“Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria.”
This phrase expresses investor psychology well. Pessimism is when everyone has given up, skepticism is when it starts to rise while people are still half-doubting, optimism is when it becomes a bull market, and euphoria is when people are drunk on the bubble. In the end, it disappears. How sad.
“There is nothing absolute in the market.”
When I was at a securities company, there was a word you were absolutely forbidden to say: “absolute.” “Please buy this because it will absolutely go up,” or “You should sell because this is absolutely the peak.” However, there is no such thing as 100% absolute in the market.
“Buy on the rumor, sell on the fact.”
This is also a golden rule. At the rumor stage, the stock price rises based on expectations. However, once it is officially announced, it is sold off as the material is exhausted or because it failed to meet expectations. It is too late once the good news is out.
“Read the tide.”
It is important to read the tide, or in other words, the flow and trend of the market. In today's terms, it means “read the room.”
“There is no selling in a bull market.”
Once an upward trend begins, even if there are small declines, the rise will generally continue to some extent. This means that in many cases, you don't need to sell immediately just because the price has dropped.
“The market will be there tomorrow.”
There was a song that said, “There is always tomorrow.” Even if you fail, it is fine as long as you win in the end from a long-term perspective.
“The market is the god of time.”
This also speaks to the importance of long-term strategy. It is said that long-term investment wins precisely because the market is unpredictable.
“Use nine-tenths of your strength in a bull market, and one-tenth in a bear market.”
You should invest stealthily when the market trend is bullish, and be a bit more cautious and reserved when it is bearish.
"The market is a living thing"
The market can sometimes move in unpredictable ways, much like a living creature. You need to be flexible in your approach.
"Do not be swayed by every little change"
If you get caught up in the daily ups and downs of stock prices—worrying about how much it went up or down today—you will only accumulate stress. Stay calm and focus on long-term investment. In the past, day trading was difficult because there were no online brokerages with low transaction fees.
"To win in the market, you must win against yourself"
This holds true even if you remove the word 'market' from the phrase. You might be your own greatest adversary, after all.
"The market is a matter of luck"
While stock prices are influenced by factors like earnings, there is also such a thing as momentum. Nothing is certain, and there is an aspect that depends on luck.
"Buy straw hats in winter"
This has the same meaning as one of my favorites: 'There is a path where others do not go, leading to a mountain of flowers.' It means that buying when something is unpopular and the price is down yields greater profits, but since you have to wait until summer, having financial leeway is important.
"When you are in a storm, you should rest"
Similar to 'resting is also part of trading,' this is a warning that if you get involved when the market is fluctuating wildly, you will get burned.
Over the past three parts, I have introduced several stock market proverbs.
Proverbs are always so profound.
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