Financial markets are remarkably confounding.  If you’ve ever speculated on stock price movements, you know what we mean.  Predicting where the market will go is hard enough.  But knowing exactly when…that’s nearly impossible.

Looking back, assigning causation, and projecting forward, doesn’t do the trick.  Neither does charting out wave patterns and drawing trend lines.  For eventually trend lines are broken.  Then what?

The point is, stocks go up and then they go down.  So, too, they go down and then they go up.  But sometimes times they go down and then they go down some more.  For what’s absolutely the right time to buy at one time is spectacularly wrong at another.  And what’s spectacularly the wrong time to buy at one time is absolutely right at another.

Take Southwest Airlines, for instance.  It was last year’s top performing S&P 500 stock…returning 124.63 percent.  This year, however, as of May 14, it was down 0.47 percent.

Make of it what you will.  But, by shrewd acumen alone, we don’t think there were many who purchased Southwest Airlines on January 1 and sold on December 31, 2014.  That would involve good luck, in addition to great guesswork. Continue reading →