John Stossel: Don't Put Much Stock in TV Experts

Creator's Syndicate ^ | May 17, 2006 | John Stossel

[opticks]

By the time you hear about a stock pick, everyone else has too, and the price reflects that. Buying stocks you hear about on TV only makes the insiders rich.

[oblomov]

Good advice. Most people (i.e. those who are able to spend fewer than 3-5 hours a week keeping up with their investments and financial news) are probably better off simply buying a well-designed portfolio of ETFs or no-load mutual funds, rather than trade.

[monocle]

A few caveats about the advice offered in this article.

1. One risk one seldom mentioned is the risk of withdrawal. If the the stock market is in a bear phase and one is required to withdraw funds, one's capital is disproportionally diminished.

2. Many studies promoting index funds use historical indices to prove the wisdom of investing in such funds. What these studies rarely mention is that indices are constantly by dropping some stocks while adding new stocks.

3. One should pay close attention to the starting and ending dates of the studies mentioned in point 2 above.

[beyond the sea]

correctamundo

[Hardastarboard]

I listen to Bob Brinker's "Money Talk" on the weekends, and he knows what he's talking about when it comes to investments. Then I hear him say some incredibly stupid socialist thing about the economy, and I just cringe. I can never understand how he understands investing so well, but can still spout socialist viewpoints on the economy. It's just amazing.

[coconutt2000]

Ever know of a mechanic with poor taste in cars?

It happens.

[FreedomPoster]

Hooray for low-fee index funds.

[SIRTRIS]

Just read about jimbo cramamerica here & his hype till March 2000 tech bubble bust ! The Fortune Tellers: Inside Wall Street's Game of Money, Media and Manipulation by Howard Kurtz About this title: From the author of the bestselling "Spin Cycle" comes an engrossing expos of how the media drive the financial markets today. Kurtz introduces the powerful journalists, commentators, and analysts whose reports have a real-time impact on the rise and fall of stocks and on the financial health of investors.

[DH]

I love to hear someone call themselves a stock "expert."

I also love to ask them if they are such an "expert" why are they working for a living.  They should be rich beyond belief.

It seems to be something they can't answer.

[oblomov]

I used to really enjoy listening to Brinker. I stopped, for the very reason you mention.

[maica]

Ditto!

[LowCountryJoe]

I'll listen to his show only when Kudlow hosts it. Kudlow has to undo everything to do with the politics of money and you can just tell that many of the callers are just incredulous with Kudlow for it.

[Abathar]

"None of the big brokerage firms would talk to me about their failure to outperform dart-throwing monkeys..."

I would love to see the looks on their faces when they get asked that question!

[true_blue_texican]

ping for later

[Ace of Spades]

Well that's amusing. Why not just go to the craps table and put your money on the pass line? At least the casino gives you complimentary beer.

[Sam Cree]

Jim Cramer *is* rich beyond belief. OTOH, I'm not particularly convinced that the ordinary guy can get rich with Cramer's picks.

[martin_fierro]

the trading advice that comes out of most of the big brokerage firms is no better at selecting winners than throwing darts at the stock table, or having a monkey throw darts.

Parrots and cage liner. I've heard good things.

[70times7]

What was that Gomer?

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