investingfromtheright

I am retired and take educated guesses on all things financial.

September 09, 2008

September 8, 2008: Following A Genius

Some advisors, commentators and talking heads seem to have the touch, and some don't. No one is correct all the time, nor is anyone always wrong.

Individuals on occasion have a special talent for imagining possibilities for the future that others overlook. However, that doesn't mean they can predict the future reliably or in any profitable detail.

Even the best speculator will be wrong a good part of the time. For this reason, however great the talent may be, the speculator will not succeed without a strategy that allows for losses.

Unfortunately, many gurus who may have a good feel for the market are unconcerned about strategy. Following their suggestions consistently could lead you to bankruptcy.

You can't succeed by simply doing whatever the genius is doing. Nor should you automatically bet against the chronic loser. The loser now and then will miscalculate and actually do something correctly.

It's worth knowing what the above are up to. When you are about to stake a speculative position in the market, you'll want to re-examine your plans if you find a guru you respect is taking an opposite position - or if you find you are marching hand-in-arm with a perennial loser.

Using independence with constant checks and balances, you can learn to be a smarter speculator (and investor) who will not lose the farm.

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