Comments on: Investment Insights: Past Performance

By: Jerry

Jerry — Fri, 04 Apr 2008 16:54:19 +0000

People who are looking for some iron-clad insurance of a stock’s future performance are bound to be disappointed at some point… past performance is only one of the things people look at to lead them to a decision, as MITbeta points out, and it oughtn’t be the major one! The information available about a company might be enough to choke a horse, but at least you don’t have to rely on another person’s (sometimes tainted) opinions.
Jerry

By: MITBeta @ Don't Feed The Alligators

MITBeta @ Don't Feed The Alligators — Thu, 03 Apr 2008 00:53:01 +0000

@Dorian:

Actually, for every stock out there, there are reams and reams of data available about the company: quarterly reports, etc. Unfortunately, even professional analysts working for major brokerage houses do not have a very good track record of deducing what how any particular company will fare over the next period of time, mainly because the ultimate fate is driven by events that do not show up in such data and reports.

Therefore it is unwise and imprudent to invest in individual stocks or managed mutual funds.

By: Dorian Wales

Dorian Wales — Wed, 02 Apr 2008 20:17:12 +0000

Cute. You can add David Hume’s Induction fallacy to those. Just because the sun rose yesterday does not mean it will again today.

Unfortuneatly we have little other data available.

Regards,

Dorian

By: MITBeta

MITBeta — Wed, 02 Apr 2008 12:57:32 +0000

@AJC:

Why not? Because investing in individual stocks is a losing proposition unless you can buy nearly all stocks, in which case an index fund would be a lot easier to work with.

Buying individual stocks will cost a lot in transaction fees, and nobody has yet found a reliable, repeatable formula for beating the market indices over the long run.

By: AJC @ 7million7years

AJC @ 7million7years — Wed, 02 Apr 2008 05:39:22 +0000

Jason Zweig, Money Magazine, uses TOO MANY WORDS:

“Buying [managed] funds … is one of the stupidest things an investor can do.”

In order to ‘pick’ a fund, you need to do as much analysis to ‘pick’ a stock … so why not invest directly in the stock, in the first place (and avoid the fund manager’s mark-up)?

By: Ron@TheWisdomJournal

Ron@TheWisdomJournal — Wed, 02 Apr 2008 03:13:37 +0000

Sounds like shorting the “best performers” could be a great strategy! The cover of this week’s Businessweek could be a treasure chest of potential shorts.

By: YoungMoneyHabits

YoungMoneyHabits — Wed, 02 Apr 2008 01:32:09 +0000

This is one of the things I cringe at when listening to Dave Ramsey. When he talks to people about investing, he says nothing about asset classes (besides “growth, growth and income, aggressive growth, and international,” which aren’t really asset classes) but simply talks about “track record.” Dave is has a great method for getting out of debt, but I’m afraid some people are going to be surprised with their investments after taking his advice.