Tao Views of the Dow

Dow Jones Industrial Average Adjusted for Inflation

The inflation adjusted chart above covering the last 100 years of the Dow Jones certainly shows the ebb and flow of the stock market nicely. It is easy to see how the highs and the lows, follow each other. As simple as it looks in hindsight, going forward boggles the mind. Is there no way to untangle the knots and see it just as simply going forward in time as it is in hindsight?

Not in the proverbial 20/20 of hindsight, but this is a useful hint: ‘I alone am foolish and uncouth. I alone am different from others and value being fed by the mother.’ Being clever and certain can be a real handicap in any attempt to see ‘it’ simply. Self interest always spawns cleverness and certainty. Impartiality quickly goes out the window which skews perception.

Balance is crucial, no less in finance than in standing on one’s head. Bucking the tide is how to ‘win’. If the tide pulls you this way, you lean that way if you want to avoid falling over. The ‘tide’ in yoga is the pull of gravity. In the stock market, the ‘tide’ is the fear to loss, the need to win. Emotional balance lies in being able to wax when the culture’s emotions are waning, to wane when they are waxing. To buy low and sell high is what everyone in the world knows yet no one can put this knowledge into practice. Well, not everyone, but most. When all feels worthless and doom is on the horizon, most are driven to sell. When times are booming most are driven to buy more and more. To do just the opposite can feel like suicide.

The chart above represents wealth. Adjusted for inflation, it still appears that wealth is increasing over time. But, what is wealth really, especially in light of this: ‘He who knows contentment is rich’. First, I’d say that the chart does not represent this kind of ‘rich’. The worldly wealth represented there is money and goods. So is that it? Wealth = money and goods = wealth? We must look deeper…

Looking deeper I see action is key. Activity brings wealth, whether we are talking about bees gathering pollen for the honeycomb, or Bill Gates gathering customers for Microsoft. And where does all this activity spring from? In a very basic way, a lack of contentment drives us to act. When we feel we have enough of what we need we rest content, or to put it another way, hence in being content, one will always have enough.

The wealth in the land continues to rise over the decades, despite the ups and downs of the market. This tells me the people are less and less content with life and so are driven to more and more activity which, as the chart shows, increases wealth. It is ironic, the wealthier we become, the less rich we are.