He starts the day negative, based on a bit of news he got overnight. Then he gets very negative and stays that way for about an hour, but then begins to see things in a different light and shows signs of becoming a little more upbeat. Now he's in positive territory! Yes, most stakeholders and onlookers are relieved and pleased. Oops, he went negative again, based on a rumor, that, hold on, the rumor has been discounted and he's now back to being positive. Uh-oh, negative territory again—his glumness has returned. Wait—now he's turned very positive and his spirits are soaring. He stays positive for a few hours but then something happens on the other side of the world and things take a turn for the worse, gloom settles in and he finishes the day slightly negative.
Whew. Welcome to a day-in-the-life of the stock market. Analysts and commentators talk of the market as if it were a living organism, perhaps a living organism with ADD. "The market today was seeking direction and in the end could not decide where it wanted to go." It's fueled by animal spirits and herd mentality. By fear, rumor and greed. By traders trying to divine meaning out of often arcane events and situations, sometimes creating huge and mostly irrational hour-by-hour swings in their outlook, which often belies the underlying health of the fundamentals. Every day is like an unsupervised three year old wandering around in a store which sells both fireworks and candy—the potential exists for either very good things or very bad things to happen.
It's sweaty palms stuff and many of us who have 401Ks and other investments just shake our heads at the huge daily fluctuations and wonder what's going on to drive such dramatic and lunatic vacillations. Can you imagine if your boss acted that way? Every day would be a potential rollercoaster ride in hell. Here's what that might be like.
7:15 a.m.—The boss comes into the office with a smile on his face. Must have been something he heard this morning on the news that put him in a good mood. Maybe, just maybe this will be one of his good days. Your 7:45 meeting with him goes well and he smiles frequently.
8:23 a.m.—This doesn't look good. He's just read something in an e-mail he doesn't like and he's in his office fuming, barking orders at his assistant, waving his hands in the air. Is that a sneer or a scowl on his face? Hmm ... I'll go with scowl.
9:17 a.m.—His mood is positively ugly and getting worse. He's turned pessimistic and is now yelling on a conference call that the company's outlook is terrible, all based on that e-mail he got earlier. Could be a long day.
11:04 a.m.—Things have quieted down in his office and someone said he reconsidered the meaning of that obscure e-mail. In fact, he went out of his way to say hello to the new hire. Is that a grin he's sporting?
12:08 p.m.—He heads off to the cafeteria for lunch and there's a noticeable relaxed mood in the office, since his own mood is all sunshine right now. Excellent. Right after lunch will be a good time to tell him the not-so-good news about those budget revisions.
1:13 p.m.—He's back and the smile is gone. So is the civility. He's wringing his hands now and his face has turned red as he's telling anyone within earshot about something he heard at the lunch table that he interprets as very bad news for his department. He slams the door to his office and throws the quarterly reports into the wastebasket. His face has gone from red to purple. Perhaps this is not the best time to bring up those budget revisions.
2:58 p.m.—His mood continues to be foul and he's acting like the sky is still falling all around him. People are tiptoeing past his office and not answering their phones when he calls. Please, day, end soon!
3:47 p.m.—He's meeting with the project team in his office and I must say he appears to have calmed down a lot. In fact, he's beaming now and, oh-my-gosh, did he just give the Maintenance Manager a hug as he left? Hoo boy ...
5:02 p.m.—It must have been something he heard in that project team meeting because he has been Mr. Nice Guy ever since. In the last hour he put through two promotions and announced that Friday would be free coffee day. It looks like he's ending the day on a high note. Life in the office is good! But tomorrow is another day and only a fool would try to predict what kind of a day that will be with Mr. Volatility.
Mike Hoban is a senior consultant for a global talent management consulting firm and can be contacted at business-at-large@ sbcglobal.net.