STREET DOGS
There's no ignorance dividend
Some investors find it difficult to ‘pull the trigger’ because they are unsure of what to do, writes Michel Pireu
For novices to try to generate profit in this incredibly complex industry is like me trying to do brain surgery on the weekends to pick up a little extra cash. — Mark Ritchie. The popular advice, "do your homework" is totally misguided when it refers to stock specific research – learning all you can about a particular stock. This type of research is mostly a waste of time, especially the study of numbers and ratios. Most of us don’t have a clue how to interpret numbers. And even if we did, if we knew everything there is to know about a stock, there’s no way we can know the market will respond to what we know, not to mention the fact that others know what we know, before we know it.If you do lots of homework, pick a stock and if it does go up, that rise may be related to your findings, but it is far more likely that it went up for any of a hundred other reasons. The most we can say is that the longer you hold onto a stock, the more likely your "homework’ will come into play and be a ...
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