Trader's Musings on Stock Market Logic

1. If the biggest single up days occur in a bear market, does that mean that the biggest single down days occur in a bull market?

2. If stocks are the best hedge against inflation, how come they fall when inflation heats up?

3. How come some mutual funds that preach "buy and hold" have an annual portfolio turnover rate of over 100%?

4. Do you know of anybody who became rich buying mutual funds? (How about selling them?)

5. Do you know of anybody a financial adviser has made rich?

6. How come there are so many wealth managers but hardly any "wealth creators" (well, outside of MLM or Internet marketing)? Does this mean that the most difficult thing is to manage wealth, not to create it?

7. If stocks move 3-6 months ahead of the economy, what does it mean when "stocks get ahead of themselves"?

8. If we can't count on Social Security for our retirement because the system is not likely to be there for us when we need it, how come US Government bonds are the safest investment around?

9. How come every recession since the Great Depression was expected to lead us into an even greater great depression but never did?

10. How come economists are so quick to declare the end of a recession but always miss the onset of one?

11. How come asset allocation did not protect you from the bear market as it was supposed to?

12. What exactly are you supposed to do when a stock is upgraded from a "sell" to a "hold" (or "neutral")? Does it mean that since you haven't sold, you might as well hold now that it's down so much, because you can't really hold a stock you have sold, can you? And what is "neutral" anyway? Does it mean that after all the research, the analyst still does not have a clue?

13. Why is it that if a stock drops but recovers quickly, the "smart money" calls it a shakeout of weak hands, but if the stock does not recover, that same "smart money" claims to have seen it early on and gotten out of it?