The American financial theorist William J. Bernstein once recalled investor Ralph Wanger (best known for his exceptional performance at the helm of the Acorn Fund) explaining how markets work:

He likens the market to an excitable dog on a very long leash in New York City, darting randomly in every direction. The dog’s owner is walking from Columbus Circle, through Central Park, to the Metropolitan Museum. At any one moment, there is no predicting which way the pooch will lurch. But in the long run, you know he’s heading northeast at an average speed of three miles per hour. What is astonishing is that almost all of the market players, big and small, seem to have their eye on the dog, and not the owner.

Source: Finance Journalist Morgan Housel in The Motley Fool

Leave a Reply

Your email address will not be published. Required fields are marked *