Introduction

1.  Lao Tzu and the Tao Te Ching

You may already be familiar with the upstart Tao Te Ching, which is considered to be the oldest Taoist classic.  This so-called classic has lots of problems.  First of all, it's too hard to pronounce.  The "t" in both "tao" and "te" is like the "t" in the English word "stick."  To the English-accustomed ear, it sounds like a "d."  For a speaker of Chinese or any of a number of other languages, that initial hard "t" is easy to distinguish, but for us, it is the very dickens (or tickens).  The Dow De Jones, on the other hand, dispenses with all that funky "t" stuff by simply using "d's."

Second, it's too hard to translate.  "Tao" means "the Way."  The Way is kind of like the Force, but not as flashy.  "Te" means "Virtue" in the sense of "power."  We're not talking about nice personal characteristics, as in "Patience is a virtue," but more of an in-living motive force.  In Tao Te Ching, "tao" modifies "te," so it means "the classic about the Virtue (power) of the Way."  How about the Dow De Jones?  Well, everyone's heard of the Dow Jones.

Third, it's too long.  Well, it isn't really very long, but it's a lot longer than the Dow De Jones.

Fourth, it's a dead document.  The Tao Te Ching will never change again.  Too old.  The Dow De Jones, on the other hand, can morph whenever the urge hits me.

Then there's the alleged author of the work, a patently bogus character named "Lao Tzu."  "Lao Tzu" means "Old Master."  Now, how many people do you know with names like that?  This is an obvious fabrication by somebody trying to legitimize a misbegotten mish-mash of indecipherable rubbish.  But let's suppose for a moment that he was real.  Lao Tzu was supposed to be a librarian or archivist.  Do you know how much librarians get paid?  Even in ancient China, it couldn't have been much.  How much weight would you give to the word of a person that poor?  I rest my case.

2.  The Story of Lao Shih

The pseudo-Chinese pseudo-classic Dow De Jones, loosely translated "The Market and Its Inanity," is the definitive work on this subject, according to me.  The reputed author of this masterpiece is a shadowy and controversial figure at best, and a figment of my imagination at worst.  The name "Lao Shih" is itself a source of controversy.  If the word "shih" is pronounced with a high tone, then the Chinese name "Lao Shih" is a respectful term for teacher.  If pronounced with a falling tone, it means "old marmot."  Scholars speculate that whatever prestige Lao Shih has accumulated comes from the mistaken assumption that his was the "Shih" with the high tone.  Add to this the fact that Lao Shih is as Chinese as you are, unless of course you really are Chinese, and the legend begins to unravel before we even get started.  So, let's not go there.

Another controversial aspect of the Lao Shih legend is whether his name really was Lao Shih.  Some scholars have maintained that his name was Thau Hua-nguu.  The latter is actually a Thai phrase meaning "dirty old man," and is not Chinese at all.  The Thau Hua-nguu proponents argue that this name has the potential for some really good smutty stories.  The opponents of this theory argue that Lao Shih is a funnier name, that Thailand is not the cool place for philosophy that China is, that Lao Shih sounds a lot more like Lao Tzu, and that I am not really very good at writing smutty stories.  So, in an historic coin flip, oh, 20 minutes ago, scholarly opinion moved decisively toward the Lao Shih alternative.

Legend has it that Lao Shih acquired his knowledge of the Market as an errand boy on the floor of the New York Stock Exchange.  He used to bring sandwiches, coffee, and donuts, not necessarily in that order, to frantic stockbrokers who were too busy to leave the floor.  If you carefully study old pictures of Wall Street panics, he was the guy who took an elbow to the face and disappeared beneath the stampeding brokers.

If anyone thinks they know a more knowledgeable stock market guru, let me know.  I will write a story about how the pretender in question met with Lao Shih, was wowed by his superior knowledge, and walked away muttering about dragons and wildebeest.  Then I will claim that the story is very, very old.

Without further ado, the Dow De Jones ...
 

One

The Dow that is falling is not the eternal Dow.
The Analyst's recommendation that can be understood is not the eternal recommendation.
The Analyst's recommendation is the beginning of buying and selling.
Buying and selling are the mother and father of the 10,000 points.
These two spring from the same source, but differ in profitability.
The origin of all confusion.
 

Two

Under heaven, there is profit only because of loss.
We can buy only because of selling.
Bull and bear complement each other,
Rising interest rates follow full employment,
Obscene profits harmonize with abject poverty,
The upper crust rests on the scum that have been run off the welfare rolls.
Therefore, the Analyst has no qualms,
And the Market endures forever.
 

Three

The Virtue of a stock is in the Whisper Number.
A company that has not beaten the Whisper Number is like one who has failed to attain an arbitrary standard.
The Analyst's recommendation is like a self-fulfilling prophecy.
Therefore, the Analyst pays no attention to actual profitability
But acts in harmony with the Arbitrary.
 

Four

A company that has beaten the Whisper Number is like a spent shell.
Surely, it will never repeat such a performance.
Therefore, the Analyst demonstrates his erudition by trashing its prospects.
 

Five

The usefulness of a vessel is in its emptiness.
The cussedness of the Market is in its total incomprehensibility.
 

Six

A good employer lays people off.
A good Federal Reserve Board chairman encourages unemployment.
A good stock analyst disparages profitable companies.
This is known as the Virtue of being illogical.
This is known as the ability to stick one's head up one's own anus
Since ancient times, this has been known as the ultimate unity with stupidity.
 

Seven

The Dow begot one.
One begot two.
Two begot three.
And three broke ten thousand.
Yahoo!
 

Eight

A rise in the interest rate follows inflation.
Inflation follows full employment.
Full employment follows an overheated economy.
Therefore, the Analyst values a sputtering economy and high unemployment.
The profit of the few arises from the poverty of the many.
This is called "accepting the hardship of others willingly."
 

Nine

Pursuing profit, every day something is acquired.
Operating the Market, every day some principle of logic is violated.
Less and less makes sense
Until total chaos is achieved.
When nothing makes sense, buying and selling flourish.
When buying and selling flourish, fortunes are made.
They cannot be made by attending to public health and welfare.
 

Ten

When the Dow rises,
The right people make out like bandits.
When the Dow falls,
The riffraff get uppity.

There is no greater sin than poverty,
No greater curse than losing a pile on a bad investment,
No greater misfortune than having a poorly diversified portfolio.
Therefore, the investor who knows a hot stock when he sees it will always clean up.
 

Eleven

The working stiff labors for a lifetime and never gets ahead.
The wage earner toils and does not become wealthy.
He who receives the minimum wage does not have a yacht and a sauna.

Therefore, the wise investor says:
    I invest and the Dow goes up.
    I do no work and wealth flows to me.
The Dow of the investor is profit without effort.