The Stock Market Teaches Humility

When you deal with investors around the globe, one thing stands out: the remarkable absence of big egos. Rather unusual in a male-dominated field.*

I believe this has a lot to do with the unpredictability of the stock market. It has a habit of bringing us back down to earth, just when we thought we had mastered the art of riding the latest market wave.

Last week, I was feeling pretty comfortable in the saddle. By Wednesday, I had already finished writing my Gutmann Viewpoint newsletter for Friday. On Thursday, we invited our clients to an online discussion. Our Head of Equities, Christoph Olbrich, and I talked about the US midterm elections, developments in artificial intelligence (AI), and the stock market in general. The overall tone was positive, and my stance was decidedly bullish.

And Then Came Thursday Afternoon

Two hours after our call, the US stock market opened, and AI-related technology stocks quickly took a beating. Whatever ego I had built up during the Gutmann online event promptly evaporated. There wasn't much of it to begin with. Still, I immediately went back to studying company news, trying even harder to understand and interpret what was happening.

Of course, I could have rolled up my sleeves on Friday morning and quickly written a new newsletter to reflect these developments. But I believe the Gutmann Viewpoint is defined by its steady hand rather than its speed in commenting on market moves. Especially when the Gutmann equity strategy had declined by just 2% from Wednesday to Thursday. Hardly worth making a fuss about.

Back to Investors and Their Egos

I find it fascinating that a certain humility seems to transcend cultures. I regularly exchange ideas with investors on every continent, and everywhere I encounter a willingness to learn and a healthy dose of humility. After all, we all want to remain open-minded enough to recognize, understand, and analyze new developments.

So a setback immediately following my optimistic outlook on Thursday morning hasn't made me any less bullish about the future. But it serves as a reminder that nobody can predict the stock market's next move. That's why thorough preparation beats forecasting by a mile. And that won't change in the age of AI.

* In fact, fewer than 10% of the members of WhatsApp investment groups, for example, are women.