Friday, October 10, 2008

Stock Market for Dummies Me


So Jeff called me at the end of the workday yesterday...

Jeff: So 660 points.
Me: Yeah ... I don't really understand those graph thingies. I basically don't understand the stock market.

(Embarrassing note: I had to call Jeff again today to get his explanation below again because I didn't take it in the first time.)

Jeff: Well, the Dow Jones is basically showing the value of the collective stock prices of the best and most profitable companies that are publicly traded. So when it falls by 2,000 points or whatever over ten days, stock basically has little to no value.
Me: Uh huh. And what's this I hear about a credit crunch. Does this affect my AmEx?
Jeff: No, it affects people who need a loan to buy things, like a house or a car. Or students who need loans for school.
Me: Then people won't be able to buy anything?
Jeff: Pretty much. Even big companies can't get loans, so some schmo looking for a mortgage is definitely shit out of luck. You can't get a loan unless you're Warren Buffet, basically.
Me: But couldn't Warren Buffet pay cash?
Jeff: Right. Unless you can buy something outright, you'll have to go without.
Me: But if people stop, say, buying cars, what will happen? Will their value go down? Will I be able to buy a car for a dollar?
Jeff: (audible sigh)
Me: What?
Jeff: Remind me not to let you manage our mortgage.
Me: Don't worry, we can't get one.
Jeff: Exactly.

I know that we are in a major crisis right now, and I know it will affect me, but I am genetically incapable of understanding the stock market. It's like the whole down system in football. What does 3rd down mean? No matter how many times you explain it to me, I will never know.

In 7th grade, one of our social studies projects was to create and manage a fictional stock portfolio (yeah, I went to Hunter). We had something like $100,000 pretend dollars that we had to invest in various stocks. I put 60% in a no-risk savings account, and the other 40% went into Jiffy Pop, Reebok (it was 1992), and something called BurkHa, which some friend suggested based on an insider tip from her Dad (to this day I have no idea what BurkHa is). I think I made like $50 on my portfolio. And I chose all of my stocks based on their names.

My current understanding of the stock market, 16 years later, is holding steady at "no fucking clue." At least I'm not rich, cause boy would I have fucked myself over. I'd probably have invested in, like, Sassy and snap bracelets. Hoo-ey, I'm glad I'm broke.

Happy Greatest Depression, y'all. Have good weekends!
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