Seattle’s weather is legendary: dreary, grey skies with perpetual mist and a sun that is so rare that a sighting of it launches planes and helicopters filled with photographers chasing tourism shots. Such a setting sounds too dull for legend, so maybe caricature is a better word. The truth is different and the locals know it.

 

America's investment environment entails similar misconceptions.

 

Seattle and the Puget Sound exit within a contorted geography that scrambles Pacific storms into confused messes. Pity the meteorologists. The Olympic mountains, out on the coast, split massive, coherent, energetic weather systems and send them north and south around the range. Depending on where they hit the mountains and where they re-collide on the other side, local weather can be torrential or sunny. Last weekend's storm hit the north end with about an inch but dumped five inches onto my backyard. So much for dismal and dull.

 

The stock market is no different. People talk about the market being up or down, bullish or bearish, fascinating or fearful. But no day sees every stock acting exactly the same. If the market, meaning the indices, are up a percent, and even they rarely are exactly the same, then individual stocks may still see massive swings up and down. As I write this, the NASDAQ is up about a half a percent (+0.5%). At the same time AGEN (a stock I am not familiar with) is down forty percent (-40%). Cascade Financial (CASB: a stock I have at least heard of) is up seventy percent (+70%). Undoubtedly, a few hundred are sitting right around zero.

 

Stocks are the market, but market movements don't describe a stock's performance.

 

A storm may hit the coast with a gale, but Seattle may calmly get an inch of rain, the ski resorts may get a foot of snow and a town in the mountain's rain shadow may get sunshine. No wonder people move to Sequim. Within forty miles of of the Hoh Rain Forest (>140 inches of rain per year) sits a town that is considered desert (<15 inches of rain per year).

 

I wonder if my view of stocks and the market is influenced by my physical climate. When it is rainy and cold, I know that it is snowing somewhere. The skier in me smiles. When the sun is out, I don't assume that everywhere is cloud free. Mountain weather means any hike can include rain. I also know that on grey days I can probably find sun by heading east until I am past the other range, the Cascades. Pilot friends also point out that, during the day, it's always sunny seven miles away - straight up.

 

Our experiences change us. If I was brought up in a place of homogenous weather (my home town outside Pittsburgh had lots of micro-climates too), then maybe I would expect the market to move in unison. Instead, I watch for the local variations, the individual stories.

 

Consider yourself. I don't know if your life has influenced you similarly. But part of being an individual investor is understanding yourself, where you come from, how your experiences have affected your emotions, what you expect from the future based on what you've witnessed in your past. Advice from anyone else is colored by their experiences. Do they know, appreciate, sympathize and understand you? The better they know you, the more appropriate will be their advice. Yet anyone outside of your skull can only guess at what is happening within. Television pundits, bloggers (me included), strangers met waiting in line somewhere, can't know the intricacies of your wants and needs that have been born of a lifetime of experience.

 

You may hear that the weather is good or bad. You may hear that the market is up or down. What matters most is your opinion based on your situation and based on your goals. It makes sense to listen to weather reports and stock market summaries, but they only describe the environment. You get to decided how you will react to it.

 

Seattle gets a warning of a storm. Some people panic. I don’t even throw an umbrella in the car. I toss in a jacket and a hat, and may wear different shoes. I'll make sure the house is secure and then I may rush to the coast to watch the waves come in, huddle at home cozy beside the fireplace, or retreat to the sunny side of the mountains.

 

The market gets good or bad news. I notice it, check for any obvious impacts on my stocks, and then may look around to see if other companies will be swung more or less than the rest.

 

Weather around Seattle is never dull, unless it is part of our regular, summer, sunny drought; also know as hiking season. The stocks within the markets are never all one way or the other. With a forecast for a storm, or for a sunny day, some stocks will benefit. Some won't. Know your stocks. Know yourself. And you'll have a better idea of how to find your own spot to watch the financial weather go by.

 

Now, I have to get the fireplace ready, which means running out to the wood shed. We're supposed to get rain today and I am looking forward to a cozy day at home, dry inside watching the weather go by.