tag:blogger.com,1999:blog-5465015914589377788.post2982612799347855254..comments2024-03-20T09:32:16.592-04:00Comments on Michael James on Money: Understanding Market PredictionsMichael Jameshttp://www.blogger.com/profile/10362529610470788243noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-5465015914589377788.post-45912270162385091202011-02-11T07:43:29.071-05:002011-02-11T07:43:29.071-05:00@Andi: To the extent that one can make an educate...@Andi: To the extent that one can make an educated guess, this information is already factored into prices. For the majority of investors who try to beat the market (and I include myself for the way I used to invest), their efforts are essentially random with a negative expectation relative to the market. Further, I don't believe that most investors can derive anything useful from economic indicators.<br /><br />None of this precludes a small minority of investors from beating the market with skill. But I think this minority is very small.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-72885696524918444652011-02-10T21:31:54.557-05:002011-02-10T21:31:54.557-05:00While in essence your post is correct, I think it ...While in essence your post is correct, I think it leaves the wrong impression that one cannot make an educated guess. The truth is somewhere in between. There is no magic formula for safe and profitable investing - if there was there wouldn't be so many gurus. At the same time, one should not pick stocks with darts, since this is not a good way. Follow some rules of thumb - many of which you presented - and by following those one can make an educated guess. And as Echo says - being in for the long haul and trust the economical indicators and not the soothsayers.Andihttps://www.blogger.com/profile/09975774781231509585noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-113890713368895272011-02-10T09:34:10.990-05:002011-02-10T09:34:10.990-05:00@Echo: Whenever I hear gurus making predictions a...@Echo: Whenever I hear gurus making predictions about assets I own I find it affects me. Fortunately, I've been at this long enough that this doesn't lead to any actions on my part any more. I find it best to try to avoid even hearing any intelligent-sounding predictions.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-15437944655868997102011-02-10T09:29:26.691-05:002011-02-10T09:29:26.691-05:00Of course I meant "immune" to the stock ...Of course I meant "immune" to the stock market noise :)Echohttp://www.boomerandecho.comnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-27187188069515639762011-02-10T09:28:15.419-05:002011-02-10T09:28:15.419-05:00I'm pretty much ammune to the stock market noi...I'm pretty much ammune to the stock market noise...it goes up, it goes down, I know I'm in it for the long haul.<br /><br />My wife and I just signed a purchase agreement to build a new house and I have to admit that I am nervous about the real estate market and interest rates. The thought of a real estate crash and/or sky rocketing interest rates probably caused us to delay our purchase by 6 months.<br /><br />I know that fundamentally we will be fine, we have a +20% downpayment and aren't stretching ourselves too thin with monthly payments. Still, maybe it's harder to ignore the expert opinions when you are just about to make a major financial decision.Echohttp://www.boomerandecho.comnoreply@blogger.com