My business partner was a stock market whiz-kid in the 90’s, making substantial money from analyzing trends, business performance, and other “fundamentals”. I tried to learn from him, but it just wasn’t wired into my psychological DNA; I suppose we all do what we’re best at.
The one belief I did take away from observing him however, was that the stock market was a business, or rather a reflection of business principles on a macro scale.
About five years ago I started noticing that he was taking more and more “baths”, usually driven by corrupt people and illegal business practices that led what appeared to be large, solid businesses, down the drain. It seemed that even his business acumen wasn’t enough to deal with all the con-artists running loose in the stock market hierarchy (and remember, this was a few years before Madoff).
In recent years, I’ve noticed him focusing almost all his capital on real-estate, and he’s told me that he’s basically completely out of equities. I too have gotten completely out of equities and into safe money markets, despite the very low yields in bonds, etc.
While his decision, I’m sure, was driven by careful and thoughtful analysis, mine was predicated on the more intuitive epiphany that the stock market is actually a casino and operates pretty much the same way. The brokers are the dealers and croupiers, the internet is the slot machines, and the casino owners are the Mob. They let you win a little from time to time to keep the juices of greed flowing, and fleece you over the long term.