The stock market is like a very excited dog, tied to one end of a long leash, with the owner holding the leash, allowing the dog to sniff randomly in all directions. Assume that in this example, the dog owner represents the economy, walking in New York City, starting from Columbus Circle, passing through Central Park, and arriving at the Metropolitan Museum of Art. From one second to the next, the dog might turn right or left; its movement cannot be precisely predicted.
However, in the long run, the dog’s direction of movement is not mysterious—just like the owner, the dog is moving northeast at a speed of approximately 3 miles per hour.
Surprisingly, almost all people tracking the market are focusing on the dog, rather than the dog owner.