That, along with “this time it’s different,” has to be one of the more expensive phrases in the English language.
In the 28 (plus) years (and going) I’ve written the “Portfolio Strategy” column for Forbes, I’ve often written about the challenges (and opportunities) in interpreting media. In my March 13, 1995, Forbes column, “Advanced Fad Avoidance,” one of the tips I included to avoid falling prey to harmful fads was:
If you read or hear about some investment idea or significant event more than once in the media, it won’t work. By the time several commentators have thought and written about it, even new news is too old.
Some will read that and the other things I’ve written on media and wrongly think I mean news is bad and should be ignored. No! News is your friend as an investor! Don’t ignore it. Rather, learn to interpret it differently and more correctly, which overall and on average can give you an investing edge.
First, reading news tells you what everyone is focused on. A valuable service performed for you for free!
Most people know to make a successful market bet, they should know something most other folks don’t. But they don’t know where to begin to know what others don’t! An easy way to start is simply knowing what everyone else is focusing on—and looking away. You can use the news for that.
The stock market is an efficient discounter of all widely known information. If you ...