Futures

Recently in my move to understanding stock markets instead of fantasy baseball player value markets, I realized one thing in common about those things that I really thrive off of: trying to predict the future. Predicting the future is a TOUGH business, and no one can say with 100% certainty of course what will come in the future, but it's the sum of many educated guesses that accumulate over time, eventually one starts to notice patterns and ways to make a better educated guess than just a wild one.

One of the main things I look at the night before the stock market opens is the Dow Futures market. It's a useful tool I get on CNBC (but I'm sure that other sites also have it) to show the predicted future value of stocks; it's basically what investors are betting the stock market will do the next day. And based on those future markets, the market sets a price to "Open" on the next day. This is actually really important, because you're basically making and losing money while you sleep! Sometimes on big dramatic rise and falls, a stock can move 5 to even 10 percent from where it traded at the close of the market the previous day without you even being able to trade on it! Kind of a scary concept, how much money one can lose. But it's also an opportunity, where if one thinks that the market is going a certain direction (and most individual investors are hoping that it's UP!) you can get good value at the opening of the market because that's when the market is the most fluctuating, has wild movements setting the tone for the whole day. Sometimes the futures values are right: futures say they go up, the Dow actually does trade higher the whole day, surprise surprise! Sometimes the future values are dead wrong, the actual prices go the opposite direction. It's the predicting, though that's exciting.

I really feed off of this futures business and trying to guess the future. Maybe it's an innate thing that humans do, trying to guess the future, but there's a lot of money to be made in it too. I'm usually either dwelling on the past (Why didn't I do x already, I could have been a millionaire by now!) or trying to know what happens in the future (what stock do I bet on now to become a millionaire?) It's the thrill of gambling too: you think you know what the future is, and you act upon that thought.

I've really turned my attention from sports outcomes (Who will win? OMG I'm dying to know!) to financial outcomes (What stock will double in the next year! OMG I'm dying to know!). I feel like my hunger in those pursuits is derived from wanting to know a future outcome, not to necessarily see great basketball and athleticism and who has the coolest shoe, I've always been someone who was motivated to get more information, see what the outcome was. That's why I was always huddled on my phone refreshing my page checking baseball scores, to get more information, see what the outcome was, know what the future is as it becomes the now. I've been able to control myself now in my 30's as, "I don't really care who wins this game, I'm not betting on it, I'm not gaining anything form it." to really caring about what stocks are doing because I am directly affected by the result, or at least my bank account is. For people like me, baseball and stock markets are addicting: there are results that come out almost every day (baseball is every day for 6 months, stock market is every weekday) and constantly more information, second-by-second, pitch-by-pitch, comes out, and the information I'm dying to know about the future, becomes the present and I get reinforced by that knowledge. It's a bit much sometimes, I admit, but now I'm able to control those urges because I understand what's motivating them: The yearning for knowledge of the future.

So what will happen in the stock market: I think despite the fears of inflation and a trade war with China, stock markets remain steady for the most part in 2018, it's safe to put money in stocks for now, and just try to weather the storm if any bad news (and there are a lot of potholes out there- presidential turmoil, oil, interest rates, Chinese trade, fear of a bubble, bitcoin collapse, etc., etc.) because the fundamentals of a lot of these stocks and companies are solid. And if the average worker like me wants to hedge their future job/ career from being taken over by computers (mine already is starting to!), bet on Amazon or some other big tech company. Amazon, for now, appears to be the "Evil Empire" (Jim Cramer's comparison) taking over all industries and eventually, all jobs. Hopefully in that future, we've all made a lot of money from having predicted the future a bit.

Fantasize on,

Robert Yan