The Information Age

It is wonderful to be alive in the information age. We know in a matter of seconds the change in the value of gold in Switzerland, the death of a world leader or the birth of a peasant in Israel.

We are inundated with facts and figures and the emotional tribulations of both famous and infamous people. Can we possibly assimilate all this? Does it help us in our daily lives?

When you begin to analyze it you realize all this information is just an agglomeration of stuff and contains no wisdom. If you were to memorize the Encyclopedia Britannica would that make you wise? Not really. You might know all about everything and you could answer questions on any subject, but unless you could correlate the facts and understand their interaction it would be of not much use at all.

I am in the financial industry. Would it help me to make more money to have memorized the Morningstar Manual? Oh, I would know the PE ratios and earnings of every company and a lot more, but will all that information tell me if the price of a company's stock will go up? Again, not really.

Wall Street has the public believing the myth that you must do research; find out everything about a company, its competitors and that industry. Now that you have done that and all the figures say that according to conventional wisdom this is a "good" company does that mean the stock price will go up? Not really. When you do your historical study you will find there is hardly any correlation in price appreciation and the fact it is a "good" company.

Financial research is worthless. If it were wisdom everyone would be rich.

The reason Wall Street brokerage companies insist you do nonsense research is so you won't sue them when their "recommendations" don't make you any money. There is only one thing you really need to know. Is the price of the stock steadily going up? The simple way to do this is to check the weekly closing price for the past several years. You can get this data at the library. If it has a nice steady upward path what more do you need to know? Everything that is known about this company is reflected in the last price transaction. In that price you are seeing all the world's research.

Information per se is not wise. It is the intelligent application of information that is wisdom. Apply your own common sense wisdom. Don't listen to Wall Street.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.

Copyright 2005

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