The Information Age

It is wonderful to be alive in the information age. We know in a matter of seconds the change in the value of gold in Switzerland, the death of a world leader or the birth of a peasant in Israel.

We are inundated with facts and figures and the emotional tribulations of both famous and infamous people. Can we possibly assimilate all this? Does it help us in our daily lives?

When you begin to analyze it you realize all this information is just an agglomeration of stuff and contains no wisdom. If you were to memorize the Encyclopedia Britannica would that make you wise? Not really. You might know all about everything and you could answer questions on any subject, but unless you could correlate the facts and understand their interaction it would be of not much use at all.

I am in the financial industry. Would it help me to make more money to have memorized the Morningstar Manual? Oh, I would know the PE ratios and earnings of every company and a lot more, but will all that information tell me if the price of a company's stock will go up? Again, not really.

Wall Street has the public believing the myth that you must do research; find out everything about a company, its competitors and that industry. Now that you have done that and all the figures say that according to conventional wisdom this is a "good" company does that mean the stock price will go up? Not really. When you do your historical study you will find there is hardly any correlation in price appreciation and the fact it is a "good" company.

Financial research is worthless. If it were wisdom everyone would be rich.

The reason Wall Street brokerage companies insist you do nonsense research is so you won't sue them when their "recommendations" don't make you any money. There is only one thing you really need to know. Is the price of the stock steadily going up? The simple way to do this is to check the weekly closing price for the past several years. You can get this data at the library. If it has a nice steady upward path what more do you need to know? Everything that is known about this company is reflected in the last price transaction. In that price you are seeing all the world's research.

Information per se is not wise. It is the intelligent application of information that is wisdom. Apply your own common sense wisdom. Don't listen to Wall Street.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.

Copyright 2005

---

Trading vs Investing

I often hear from people, "I don't trade. I invest.... Read More

DIY Portfolio Management

Exchange Traded Funds (ETFs) are growing. Investors are choosing low... Read More

Stock Valuation using the SMP Model

Disclaimer: Please note that I do not necessarily purchase, own,... Read More

Why Buy and Hold?

Since I can remember, and that's a long time ago,... Read More

What the Hell is a Stock option?

A 'stock option' is a contract between two parties giving... Read More

Financial Crime

Congress recently passed another new law that is supposed to... Read More

Hot Stock Trader: How to Pick Momentum Stocks with Ease and Simplicity

Most stock traders know that momentum trading can be a... Read More

How Much Information Do You Need?

You have decided to buy some stock or mutual funds,... Read More

I Love You, Warren Buffet

Sometime around 1980, can't remember exactly, there was a flight... Read More

Evaluation I

An insane person cannot evaluate an insane evaluation system.As you... Read More

Is Your Garage Full Of Junk?

I have a 2-car garage. There are nice shelves on... Read More

Pamplona, the Wild Investment Bulls

You remember (they show it on TV every year) the... Read More

Expense Ratios

Mutual funds and brokers are always preaching not to buy... Read More

Cash Is A Position

I go to the Money Show every year to visit... Read More

Traders, Defend Against the Dreaded Death Spiral.

It has often been said that there is only two... Read More

Defining a Long-Term Investment in the Stock Market

For some "long term" would mean holding a stock position... Read More

Intervention

Intervention. Now don't let that big word scare you. The... Read More

Hold Em and Fold Em

When most analysts, financial planners, fund specialists and investors try... Read More

Small-Cap Stocks: The Beginning of the Journey

When an individual investor wants to roll up his sleeves... Read More

How To Make, And Keep, Money Trading Stocks

If you are serious about making and keeping money by... Read More

Stock Investment Advice

Stock investment advice is easy to find. Do you get... Read More

Choosing A Fund

For years I have been saying you must have a... Read More

Acapulco - The Stock Market Dives

There is a famous cliff on the ocean in Acapulco... Read More

Trend Trading - Trading Stocks Using Technical Analysis and Swing Trading Strategies

Peter is a professional trader, Paul is not. Peter has... Read More

Its A Bull, Its A Bear, Its Suptertrader!

The higher the market goes the more confusing are the... Read More

What is the Most Important Indicator of All?

Most stock market traders have a favorite technical indicator.The one... Read More

Why Stock Is More Risky Than Options!

You probably have been told that options are risky. Even... Read More

You Wont Like This

Why? Because I am going to shatter your conventional wisdom... Read More

Outsourcing

It's about time someone spoke the truth concerning outsourcing. The... Read More

Will the Stock Market be Lower in October?

The stock market often closes a week in the middle... Read More

Some Good News for A Change

Before we get into all the good news out there,... Read More

Dividend Reinvestment Plans: Investing on Automatic Pilot

If you're like many investors who squander those small dividend... Read More

The Secret to More Winning Trades is as Simple as Avoiding This Common Mistake

If you're a normal human being, your need to feel... Read More