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Most Market Comments Are Worthless Garbage

February 27, 2013 | About:
To appreciate how useless technical jargon and charting can be, you need to read it line by line.

I will not disclose the author of the paragraph shown below in order to protect the guilty.

This 'insights' below were published early on Tuesday, Feb. 26, 2013, following Monday’s greater than 300-point intra-day negative reversal of the DJIA.

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1) The analysts and commentators warning about a market peak could indeed be correct.

It’s hard to argue with that.

2) Perhaps a major top is in place.

What action does that dictate?

3) They could be wrong as well.

That’s always a possibility. What action does that suggest?

4) The market could be presenting a bear trap.

It might be. What action does that call for?

5) If support levels hold, or are temporarily breached…the market may move higher.

If the market doesn’t go down, and stay down, it may go up.

6) Any true breaching of the support level may indicate a significant correction.

If the market goes down significantly we might be in for a down market.

7) Plug your ears and watch the charts.

You will only know if Monday’s action was a buying opportunity or the start of a correction ... after it is too late to act on that knowledge.

The true value of the shares you can buy does not vary based on market action. In the absence of any negative company-specific news, lower prices are good for investors with money to commit.

About the author:

Dr. Paul Price
http://www.RealMoneyPro.com
http://www.TalkMarkets.com
http://www.MutualFunds.com

Visit Dr. Paul Price's Website


Rating: 3.9/5 (20 votes)

Comments

valmorin
Valmorin premium member - 1 year ago


Really, fellas, is anyone actually surprised by this?
xtddd
Xtddd - 1 year ago
i agree with you! Excellent!

"The true value of the shares you can buy does not vary based on market action. In the absence of any negative company-specific news, lower prices are good for investors with money to commit."
buhrlakc
Buhrlakc - 1 year ago


This type of commentary is so frustrating. I always thought it gave many amateur investors a false sense of what is truly important in investing. However, as I started working in an institutional setting, I was absolutely shocked how many "professional" investors looked at this type of BS. Last week, just for fun, I looked at a 25 page stock market report from one of the largest wall street firms. There was one page that had anything to do with value- the remainder of it was technical crap or random non-sense about some large macro event that was suddenly going to cause a 15% pullback. Sure, the event could cause a pullback, but the thesis was based on predicting price movements, not on buying/selling for a fundamental reason. Much to my surprise, several colleagues of mine thought it was a great report. I'm always amazed how many professional investors I talk to that couldn't tell you the first thing about Warren Buffett, Seth Klarman, Donald Yacktman, etc. Rather, their belief system has been learned through wall street, academia, or their own institutional firm. Why don't serious investors follow the teachings of the best investors in the world?

I'm not sure I can think of another industry that provides so little value to consumers, but yet gets paid so handsomely to do so. Paying Buffett, Klarman, etc. is worth it. But how can commentators like the one referred to in this post be considered important to the investment landscape? Why do so many funds have sticky dollars, even when performance is bad?



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