A Crap Shoot by Another Name

I am a reformed gambler! It's true. For decades and until I quit cold, there was hardly a baseball, football or basketball game that I didn't have a bet on. Like any other addiction, it only got worse with time — until I got the message that it was a lost cause.

At great cost and after enduring much misery, I conceded that my vaunted knowledge of sporting events was illusory. In the past five years, I have not made a single wager on any game. Nor do I ever intend to.

During my betting days, in addition to my monetary losses, I suffered the ignominy of gambling in uncomfortable solitude. It certainly wasn't something to share with proper friends. Best not to speak of it. I felt, even though I owed no living soul a cent and it was my own hard-earned money I wagered.

All of this past history has come to mind now as the panic of 1987 hits the stock market. As the stock prices came cascading down like the waters of Niagara Falls on Monday, October 19, the market was the primary topic of individual conversation and filled the newspapers and airwaves.

Even though I have closely followed and extensively invested in the stock market for over 40 years (happily, more successfully than in my betting), I will not attempt any rational explanation of the recent debacle. There are more than enough pundits with egg on their faces to undertake that redoubtable task. Besides, the decline has probably not yet run its course.

However, the issue I do want to address is the unquestionable speculative nature of the stock market. Nothing could better illustrate that point than a 508 point drop in one day in the Dow Jones Industrial Average. That one-day, 23 percent decline of October 19, 1987, was equalled only by the same two-day drop of 23 percent on those historic days of infamy, October 28 and 29 of 1929.

True, since August of 1982 the stock market has tripled in value, but can there be any rhyme or reason to an institution subject to cracks of such earth shaking magnitude in one day? Ask the dazed brokerage houses, the frightened little investor, the individual who has seen his retirement nest egg halved overnight.

Despite the prestigious aura surrounding the stock market with its self-assured 28-year-old yuppie millionaire financial analysts, its most sophisticated computer technology and its air of respectability, the recent frenzied gyrations have exposed it for what it really is: a giant, floating crap game.

The ordinary individual with little knowledge of the ramifications of the stock market has less business being in it than I had betting on some distant football game.

Sadly, the fallout will negatively impact on many people too poor to have invested and the investment community, made up of highly paid and supposedly knowledgeable financial advisors, all ran for the fire exits. The underlying economic factors could not have changed overnight, but reason no longer prevailed.

The smart money managers just no longer trusted their own judgments and followed each other down the chute like the lemmings they really are. They proved themselves hardly worthy of the trust reposed in them by the investing public, or meriting the inflated million dollar salaries they earn (or rather receive).

Mad Monday was a sad and dramatic spectacle of a cattle stampede and mob psychology in action. The credibility of the stock market cognoscenti was grievously damaged.

Overnight all the hype, hyperbole and uncurbed optimism so prevalent in the pre-October days as the Dow Jones climbed to over 2722 was replaced by an air of pervasive pessimism. In the once august and highly respected stock market, the line between euphoric buying and chaotic selling is indistinct.

The one overwhelming insight that comes through from that wild Monday panic sell-off is the psychological nature of the beast.

Let's face it. Investing in the stock market involves an element of greed as well as risk taking.

Speculating in the market is exciting and quite exhilarating when you win. When you lose there is shock, depression and loss of self-esteem. Initial concern leads to fear and then loss of control and panic and a frantic dumping of stocks, as witnessed by the high October volume in the market.

All of these factors are also prevalent in betting on games or shooting dice, except instead of dumping stock I doubled my bets when on a losing streak.

So clothe it in a fancy name such as stock market investing or speculation instead of betting or gambling if you will, but it's now exposed as one and the same.

Instead of the bookies, the sharpies on Wall Street beat you.