Stock exchange = Highway (a post from my deleted blog)

When i was driving, i started thinking about the similarity of a driver’s psychology and a stock trader’s psychology; highway and the stock exchange; cops and the SEC.Stock exchange is like a big highway with entry points and exits as you go. Somebody gets a good entry point when the market or the traffic is moving fast. Somebody gets not that good an entry point when the market or traffic is moving slow. In any case there is no such thing as a bad entry point. It all depends on how you work your way across the lanes, the actual trading.Speculators are like reckless drivers changing lanes insanely, day-trading. Speculators gain a lot, move fast, gain money like the drivers gain on time. But like reckless driving, speculation can be deadly.Traders who dont take any risk are like the drivers in the right most lane. They invest in bonds and some MFs. A good investor switches lanes at the right time. He doesn’t change lanes for small gains, he waits and trades for a big gain.Cars are compared to the stocks. Certain cars give you better mileage, even tax deduction and not much of a bumpy ride. Some cars like lexus, acura and infinity can be compared to the good large-cap stocks with better returns. It gives you luxury, mileage and everything you need like a good large-cap stock that gives you dividend and has considerable growth. They can be compared to the large cap value-stocks.Then comes the mid-cap value stocks like Toyota camry and honda accord.Then comes the micro-cap stocks like hyundai accent and other compact cars.Funds can be compared to the carpools.The cops who regulate the traffic can be compared to the SEC. When you see some anomaly in any of the stocks, like a car driving very fast or driving very slow, it is pulled over for enquiry.