Being the market

Some years back, as I was transitioning into the financial advisory world, I asked a woman whose firm I was considering joining, who invested only in actively-traded mutual funds and herself traded little, only to rebalance to fixed asset allocations on a quarterly basis, why she read about individual companies and trends if she was outsourcing the task of implementation to others. "That's a really good question," she allowed.

And it is one I could easily ask of myself, since I use ETFs and mutual funds to implement portfolios almost exclusively. In the final analysis, I feel obliged to read about individual companies and their securities because there is a simple pleasure in being the market, in observing the warp and woof of history as it plays out in its infinite complexity.

I would say also that the work of the markets, by and large the broad provision and distribution of goods, services and opportunities to the world's population, is a relatively uncontroversial good. Yes, the ecology of it all is complicated, to the extent that we would appear to be rendering the world progressively less if not outright un-inhabitable, but we are working on that. Hopefully quickly enough, though I'm not sure. Also, there is a very reasonable and time-honored debate as to how good the markets are as arbiters of who gets what, and what is the role of the state as both regulator and provider of capital. I doubt this debate will ever reach resolution, but we may hope that it will trend towards optimization.

This is by way of contrast with politics and social discourse, which are themselves also complex, fluid and dynamic to an extent none of us can grasp fully, but only as they unfold on a day to day basis. But they are ever fraught with conflict and minefields, so it is hard to try to take them in anything resembling an objective fashion, without being drawn into the emotions of their flow.