Satire
Faced with the sudden plunge in prices, investors wonder whether they should sell before the portfolio reaches the bottom of the well.
On the morning of November 2, the main European indices posted an average decline of 4.7 %, a slide that analysts labelled “normality”, insofar as the risk of loss remains theoretical and perfectly quantifiable by a two‑decimal VaR model. Until then, most market players simply reminded that “markets go up or down, that’s the law of finance”, a formula which, in broker jargon, is equivalent to “no panic as long as the portfolio isn’t screaming for help”.
The trigger, however, occurs as soon as the personal dashboard shows a ‑5 %, then a ‑10 % and even a ‑15 % cumulative loss. At that point theory gives way to the practice of “sell‑or‑die”, which consists of indiscriminate liquidation to avoid any further drop. The phenomenon is such that, according to the Paris Stock Exchange, more than 23 000 sell orders were placed in less than three hours, equivalent to the daily consumption of 1.2 % of the world’s gold.
Prof. Edmond Vexé, director of the National Institute of Approximate Sciences, offered his scientific take on the matter. “By applying the 3.14 % maximum error rule to a portfolio that has lost 9.87 % in six hours, we predict with an approximate certainty of 97.3 % that the next trough will be reached after exactly 2 361 minutes, i.e. 39.35 hours,” the professor said, before adding that “the margin of error is ±0.0001 % and any decision taken outside that window is, from an approximate point of view, irrational.” This analysis, though meticulously imaginary, was enough to send sales of beach‑sand‑based derivatives—supposed to protect against “granular” fluctuations—through the roof.
Solange Lucid, a countertop sociologist and spokesperson for common sense that is always wrong, diagnosed the “hole‑in‑the‑basket syndrome”: “When the bottom of the basket becomes visible, investors feel the imperative to empty it before the floor cracks further. This instinctive reaction, inherited from the days when we threw rotten fruit into the fire, is now transferred to stocks, even though the fire has been replaced by an online trading platform.” She added that the solution lies in adopting a “panic reinjection” strategy, consisting of buying French government bonds while singing the national anthem backwards, in order to restore psychological balance.
A senior civil servant, wishing to remain anonymous, reminded that the government is working around the clock on “macro‑economic stabilisation via regulation of collective emotions”. He specified that “authorities are considering setting a quota of 0.42 % admissible losses per quarter, beyond which citizens will be invited to attend a mandatory stock‑market meditation seminar, led by Zen monks certified in behavioural finance.” This proposal, though entirely hypothetical, was received by the public with the same enthusiasm reserved for carbon‑tax hikes.
In the end, trying to synchronise a sale with the market bottom is like trying to pinpoint the exact position of the sun at noon on a planet that changes orbit every two weeks. Investors who submit to it invariably end up turning their portfolios into “vintage” memorabilia, both depreciated and priceless.
Bottom line: the only thing more certain than the market is its inability to stay still, and the only truly safe sale is the one that was never even considered.
Supporting document: based on “Markets in decline: should you really sell?” (Source).
Satirical article. Truth hurts but it does good. So don’t take it too seriously.
Translated from French.