The father of value investing, Ben Graham, had some rather straight forward thoughts about investing, especially the marketing machine that surrounds markets and how it convinces everyday investors that they can out perform if they follow it.
How would anything that’s read at a wide scale or distributed to the masses help everyone all at once? Who is the counter party in the situation? The quote is as follows:
“It is absurd to think that the general public can ever make money out of market forecasts. For who will buy when the general public, at a given signal, rushes to sell out at a profit? If you, the reader, expect to get rich over the years by following some system or leadership in market forecasting, you must be expecting to try to do what countless others are aiming at, and to be able to do it better than your numerous competitors in the market. There is no basis either in logic or in experience for assuming that any typical or average investor can anticipate market movements more successfully than the general public, of which he is himself a part.”
— Ben Graham, The Intelligent Investor, Page 190, which you purchase on Amazon right here
The next time you read an article that says “This stock will do this!” Or “this analysts thinks this!” Or “the next bull market begins!” Think of this quote and who it is geared toward and who is on the other side of such a trade.
In 2023, the Nasdaq-100 gained 55%. Yep… 55%!
No widely read analysts or predictions or articles were saying this at the start of the year – actually close to the opposite.