Core Conviction #2: Doing Your Homework is Overrated

core convictions Dec 17, 2021

Have you ever received a recommendation from your advisor, investment guru that you followed, a friend or someone you trust about a specific stock that he thinks is about to move? And he claims the company is doing these amazing things, and it's a rare opportunity. You dug up the information yourself to verify. You bought some shares of the company and, it happily goes up after that. But then it starts to go down after a while, and it gets lower and lower. Your trusted "adviser" (could be your brother or sister) keeps telling you all the reasons why it shouldn't be. The thing is that all the good things you hear about the company may turn out to be true. Both you and your trusted "adviser" have done your homework diligently. But here is the point: there is a disconnect between what you know and what the market knows, and as a result, the share price of the company that you research may not react to what you expect. This often leads to confusion and frustration, not to mention...

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Core Conviction #1: Nobody Has The Answer

core convictions Feb 17, 2020

The most common question that I get in my speaking involvement at various conferences in the region is: “What is your view of the stock market for the next year?”. It never fails to amaze me how often this question is asked time after time. And then there is the reporter’s request for a quote on what I think explained today’s movement.

 

The blunt reply is “I do not know, and your guess is as good as mine.” That sounds arrogant. But I am candid here. In truth, I am not trying to keep any secret to myself. All that I am saying is that nobody has the answer.

I would even go to the extent of saying that the chimps in the zoo have a good chance of being right as the “savvy” professional. The stock market is complex, confusing, not to mention perplexing, puzzling and unfathomable. This is a theme that I will keep coming back to. And because it is so complex, and nobody really has the answer. There will always be people who proclaim...

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