Do not listen to the Stock market experts

Last week I met my very experienced stock broker friend.

While I was talking about the shape of things to happen in the stock market in the coming days, one thing he was clear in telling me that not to listen to stock market experts and take any investment decisions.

I asked him why?

According to him that the dips and dives in the markets are very sharp many times that would make even the most serious investor’s head swim and therefore he could not spell out the ideal definition of “stock market experts”.

Nor I don’t have any idea of who is a “stock market expert”.

May be those investors lose less and gain more.  Or a person who holds for very long time and waits for an opportunity or a guy who makes or loses quick or smart money and quit the market. That is a guy who makes money in stocks!

All that I know is many of my investor friends listen to and read business news in the media and some watch CNBC like business channels’ exclusive market discussion slots to know the pulse of the market.

Quite a few lend their ears to “stock broker’s story” or gossips.

From his experience my stock broker friend asked me to do the following if I want to begin to learn how to become a wiser investor.

That is to lose less and gain less.

Most of the news talked in the market or on the floor of stock exchanges is source based information and half is cooked up and the other half may be confusing and hence avoid.

If the news journalists and technical experts knew the answers to life and investing they would not be ‘making’ the news.

Most of the sites in the internet giving exclusive” buy or sell” recommendations are only making for a sales pitch and hence do not fall a prey to their offerings and so on.

If they hold the easy ticket to make money they would be making the green stuff and why do they want to share for a petty yearly subscriptions. Investors many times have been misleading.

Similarly after buying or selling your stocks do not listen to the experts or read too many books on how to make money from the stock market. Whether you have purchased as per the situation explained in a particular book and so on.

It is like learning swimming or boxing by reading books and for normal investors it is of no practical use and moreover books represent different times and consequences.

An idea or strategy recommended at one point of time and followed by a particular group of investors may not hold good for contemporary times and hence no use in following on those lines of thought.

The financial markets are very dynamic and no one has ever exactly predicted the turning points in the stock market history. In most of the time losers outnumbered the gainers. Whether it is bull phase or bear phase.

I recollect some conversation that I over heard in the Wall Street that- “I hear that you drop some money in Wall Street. Were you a bull or a bear? Neither, just a plain simple ass!

Finally my friend suggested me to understand the clue from the simple average of the price movements to get in and get out.

Then only I understood how relevant when someone said – “Technical analysis” is the art of drawing a crooked line from an unproved assumption to a foregone conclusion.”