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Psychoanalyzing a Mental Market
The BMW Method

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By BuildMWell
March 1, 2007

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I am not a professional psychoanalyst. However, it does not require a college degree to recognize the wild swings between his delusions of persecution and illusions of grandeur all afflicted with apparent logic and reason. Yesterday is a perfect example.

Now, all of us BMW Method practitioners can see the swell position the stock markets were in prior to yesterday's irrational fit of passion. If you need a refresher, take a gander at Mike's chart of the actual situation.

Now, we can readily see where Mr. Market took off on one of his famous illusions of grandeur episodes around mid-year 1995. He continued to delude himself and hype himself into a serious fit by early 2000. Some would say he was overtaken with euphoria for over four and a half years.

Then, without any warning he cracked. He developed a split personality and went into a yoyo pattern as the tried to determine if he was actually a Bull or a Bear when he was really just Mr. Market. This confusion played out in 2002 as he fell into an irrational, depressed state. And then, just a suddenly as he reversed course at the high, he did the same at the bottom. These are classic signs of paranoia.

I have no idea if it was the drugs (MRK and PFE) or just a solid round of self evaluation, but in early 2003, Mr. Market reversed course completely once again and began a steady and very respectable recovery. It was as if he miraculously discovered his real self once again. His growth chart showed steady improvement and all vital signs were right on the money. He stayed in almost perfect form for over two years.

Yesterday he showed signs of a relapse into his old ways. However, I see this as a really great sign, if I am reading his chart correctly. Mr. Market was getting just a little too far on the euphoric side and had slowly been trying to repeat his irrational exuberance thing again. But, he self-corrected with a jolt in one day and fell right to the point of perfection. He went no lower and has slightly corrected again to the plus side.

My evaluation suggests we must watch Mr. Market's chart very closely. He is not doing anything that concerns me using the BMW Method measures. In fact, yesterday was a very positive step in the right direction. It shows me that Mr. Market has gotten control over his delusions of persecution as well as his semi-rational exuberance. In a word, he is still acting normally. Unless he does something else to change my perspective, I still give him a clean bill of health. A few more days of more normal behavior and I might begin to get a little semi-rationally exuberant myself.


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