Tuesday, October 14, 2014

Are you crazy?

I took the series 7 exam about 14 or 15 years ago! One of the laws or theories that I still remember the most from the exam was something called the odd lot theory! The odd lot theory says that most individual (regular small time investors) don't usually have the financial wherewithal to buy the large blocks of stock 1000 5000, 10,000 shares so they usually buy what you call odd lots of 130 or 225 shares etc.

The theory is that the average person or "average" small time investor is governed by fear, and has lower risk tolerance, and won't risk losing what they have, not even to potentially gain more.  So in times of panic in the market, small time individual investors just follow the masses and sell. So when you see an increase in random odd lots of stock being sold, Its being sold by "average" small individual investors. And whatever the large institutional investors see the "average" small time investors selling in masses and that's when the big/ institutional investors are buying. And when small individual investors start buying thats when Big/institutional investors are selling!

I guess the point in saying all of this is that we know that by and large, the "average person simply wanders through life and follows the crowd. As a result, the average person in life gets average results in life. But, to those who have a burning desire to become, to have, to accomplish something different than the "average" person, you are going to have to do things differently than the average person. Just like the odd lot theory states, if the crowd and the masses are going left, you may want to look into going right, when the masses are sleep, you may want to be awake, while the masses are spending you may want to save. While the masses are satisfied and complacent, you may want to step it up and work harder etc!
 
BE, DO, BECOME, THINK, ACHIEVE SOMETHING DIFFERENT!
 
Don't worry about looking or wondering if the world thinks your crazy. I have learned that....
 
"THE ONES WHO ARE CRAZY ENOUGH TO THINK THAT THEY CAN CHANGE THE WORLD, ARE THE ONES WHO DO!"
-Steve Jobs
 
But, then again as I had mentioned this all just a theory! 
Carry on!
 
LEAVE YOUR MARK!
 
Have a great day

PEACE!

No comments:

Post a Comment