Gary Shilling says stop treating the market like a person with feelings

Famed financial analyst Gary Shilling is best known for bold predictions as wide-ranging as $10 oil, wage inflation and the war between Alibaba and Amazon. He recently spoke to Business Insider about how many investors wrongly apply interpersonal skills to the whims of the stock market. Following is a transcript of the video.

Gary Shilling: Don't get antrhopomorphic about this. The market is not a human being. It is not going to react in human ways, in human emotions. You talk about your dad. My dad used to say if a stock went down: "Well it will always come back." And of course there are a lot of individual investors who if a stock is down they just want to get out even: "You know it goes down when it comes back up to where I bought it then I'll get out."

But no, there's nothing that says that if a stock goes down that it's going to stop going down, it isn't going to go to zero. Could be fraud. It could be a company in an industry which has simply gone out of style. It's no longer working. Read an article about J.C. Penny. You know he was the found of J.C. Penney the department stores. And he got big into agriculture in his later years. And he was developing a mule which was the best mule around. Well mechanical tractors kind of put the mules out of business. So that was not a great idea.

So it isn't really just saying: "Hey if it goes down it's gotta come up. It's a buying opportunity." There are far few people who'd say when stocks are up: "It's a selling opportunity."