The Stock Market and Faith
Value Judgements
To many people, the stock market is a mysterious and unpredictable paramour who will reward us if we invest well and punish us for making poor choices (or for having bad luck). However, the truth is, investing in the stock market requires something more than astute judgment and good fortune: It requires faith — and blind faith at that.
To understand why, we need to start with the basics.
Suppose I own a business that needs to raise money, and I want to get the money from you. I have two choices. First, I could ask you to loan me the money for a certain amount of time. I might promise to pay back all the money on a specified date and, until that date, I would agree to make regular interest payments. (In effect, I would be selling you a bond.)
