MICHEL PIREU: Why geeky outsiders often make better traders than cocky jocks
The stock market is nothing if not a place of pure deception. Just when you think you have it figured out it changes course, leaving you scratching your head. Just when it seems to make sense it makes no sense whatsoever — which would appear to be the case most of the time. Economics? You’ll be hard pressed to find a connection between economic data and reports and market behaviour. Earnings? If a company beats the consensus its stock must go up in price, right? Wrong. There’s simply no way of knowing how the market will react to an earnings report. Analysts and the media will always have an answer – if the stock rises no explanation is needed, if the stock falls it’s because the market expected better – but it’s just repetition. Maybe true, maybe not. Analysis? Even if your research does find "value", it could be a very long time before the market recognises it – if ever. And just because a pattern or technical benchmark has been shown to work in the past doesn’t mean it will do so...
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