Lynch Lyrics
Stop Listening to Professionals
"Rule number one, in my book, is: Stop listening to professionals! Twenty years in this business convinces me that any normal person using the customary three percent of the brain can pick stocks just as well, if not better, than the average Wall Street expert. I know you don't expect the plastic surgeon to advise you to do your own facelift, nor the plumber to tell you to install your own hot-water tank, nor the hairdresser to recommend that you trim your own bangs, but this isn't surgery or plumbing or hairdressing. This is investing, where the smart money isn't so smart, and the dumb money isn't really as dumb as it thinks. Dumb money is only dumb when it listens to the smart money."
"In fact, the amateur investor has numerous build-in advantages that, if exploited, should result in his or her outperforming the experts, and also the market in general. Moreover, when you pick your own stocks, you ought to outperform the experts. Otherwise, why bother?"
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1 comments:
Mr Moola,
I think this phenomenon of an Investing beginner being able to outperform a research analyst is very interesting!
Why is it so?
In no other profession does a beginner look down on a professional except in investing.
Is Fundamental & Technical analysis
so useless?
If both techniques are NOT useless
- then, are they so extremely difficult to master, that the majority of practitioners will fail to do their job properly - leading Lynch to urge us to "stop listening to professionals" ( completely ?).
Alternatively, is it possible that the investment experts fail because they are lazy or sloppy rather than because they lack a good grasp of their techniques?
Where specifically does the fault lie?
Another point is : Are the professionals so bad?
What is the success/failure rate?
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