Many people have stopped watching the NBA after Michael Jordan retired.
Sure, Kobe Bryant, who has himself hung up his jersey, and LeBron James kept many fans tuned in, but they could not replace MJ in the hearts and minds of die-hard fans.
When Stephen Curry and his dominant Golden State Warriors burst onto the scene, they brought a new spark to the league.
Much like the NBA, the stock market needs superstars to maintain its vigor.
Sometimes, a lifeless market is due to poor performance but at other times, it’s because it lacks a highlight or a “star” stock.
Last year’s trading fever could be compared with the NBA frenzy whenever the likes of Jordan, Bryant, James or Curry catch fire.
Peak transaction volumes would be akin to blockbuster ticket sales.
But unlike the NBA where heroes emerge in every game, the stock market takes time to produce its own, sometimes up to two years.
There might be a few stocks waiting to be discovered.
Some investors might start betting on them early on, fully convinced of their potential.
In their minds, they are creating future superstars.
But they forget that the stock market is a big playing field. Winners and losers emerge after having dealt with factors beyond their control.
It’s also notoriously fickle.
Given the weak global economy, why do you think the stock market is poised to climb again?
That’s hard to explain in basketball terms but perhaps we can mention that once in a while, over-eager investors need some distraction.
Like an NBA game.
This article appeared in the Hong Kong Economic Journal on April 13.
Translation by Myssie You
[Chinese version 中文版]
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