If you’re new to investing or trading and uncertain as to which method(s) of stock selection to use, then financial analysts, market gurus, and stock pickers on business television will likely impress you with their vast amounts of wisdom, giving you and a lot of other people their “moneymaking” advice free of charge. Don’t let the Dalal Street, business-suited baboons fool you! More often than not you’ll pay a heavy price for taking their “free” market advice.
Why? The simple fact is that they will often be as wrong as they are right. In other words, their batting average may be about the same as what you can achieve by random selection. What’s wrong with this picture? Aren’t there any real experts out there? Don’t any of them know what they’re talking about? If they’re not real experts then how did they get on television? Isn’t it illegal to represent yourself as an expert if you’re not?
If you look a little closer at the names of TV analysts, you’ll notice that they are actually stockbrokers, fund managers, or other people who have control over a large amount of money. So it’s only logical that they will take whatever chance they can to make those stocks they’ve chosen to invest in move a little more. The problem with doing what the analyst says is that as soon as the stock’s price is jacked up enough, the big guys get out.
The hard-earned bananas of the individual chimp are sacrificed to make the portfolios of fund manager baboons look that much better. In the end, the individual trader learns nothing from following the advice of the big guys other than not to listen to them. You always learn better if you
make your own mistakes; then you’ll know just why you made those mistakes.
Also, watch out for apes and gorillas that go on TV claiming to be independent. Always be wary of what they say. They may be recommending stocks because they are somehow affiliated with those companies.
We would not imply that these people are doing anything illegal by touting these stocks; however, it is always good to be aware that there could be any number of reasons that a stock is promoted to a general audience.
