The U.S. economy is lagging worse than reruns of The English Patient. While the banking and real estate industries have their investors in tears, oil and gas investors are sporting Tony Robbins-sized grins, puffing on a $50 Cohiba as their yacht pulls into the harbor. What’s my point, you ask? They were opportunists, seizing opportunities when others looked the other way. When asked what his investment strategy is, Warren Buffet—worth a reported $62 billion—explained that he “simply attempts to be fearful when others are greedy and to be greedy only when others are fearful.” The market will eventually rebound, that’s the beauty of capitalism. In today’s bearish market, there’s no better time to sin than now.
If you’re already investing in the market, congratulations, let me get you a cookie. However, for the rest of you, you’re either extremely conservative or just gun-shy about putting your money into something you don’t fully understand—the stock market. Let’s face it, if you knew as much about the stock market as you do about the various fantasy sports draft strategies or salary caps, things would be different, right? Well you’re in luck, because it turns out that fantasy sports actually represent an experimental market, so knowing how to run a team makes you capable of running your own stock portfolio. I know, you’re excited, but settle down a bit so that we can learn some basic concepts to get you on your way to stock market riches.
Let’s start with the “big picture.” The fantasy league represents the market, team owners are the investors, and the players are the stocks. Write it down. Still with me? Good. Now let’s get an introduction to the meat of this sandwich—relevant financial theories.
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