MICHEL PIREU: Investors should look beyond gurus’ advice to find own edge
Financial markets icon Warren Buffett’s pearls of wisdom may not work for ordinary people
Guru investors can have the effect of artificially running prices up or down to the indirect benefit of the few. Regarding the broader market, the artificial nature of this effect means that the sustained accuracy of gurus’ advice — the gains initially on offer — decreases as consensus increases. Listening to gurus often leads individuals to take more risk than they should. So don’t pay too much attention to financial market icons — the likes of Warren Buffett and George Soros. Instead, find a way to look beyond the media spotlight. As Marcus Padley says, "the closest anyone who relies on a few Warren Buffett quotes is ever likely to come to the Warren Buffett Way is wearing a cardigan and living in the same house for the rest of their life". "It can be difficult to ignore headlines and soundbites from ubersuccessful investors," says Ben Carlson at A Wealth of Common Sense, "because you want to believe that they’re giving you advice when they speak in public settings. "My general ru...
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