As it turns out stock picking is a process that proves Max Ma’s Law:
“That’s not a problem; that’s impossible.”
Jason Zweig did an interesting piece recently for the Wall Street Journal. His conclusion based on research by finance professor Hendrik Bessembinder of Arizona State points out some less than obvious details.
The future unfolds differently than we expect because we base our expectations on the past. Daniel Khanamen has pointed out that the past is without risk. Everything is obvious and makes sense. The future is not like that.
Amazon looks easy to see now. It was not in 1996 and even less so later.
“The average return of the stock market, and the return of the average stock in the market, are nothing alike.”
If the average return is good enough to meet your objectives, why risk losing everything by chasing the vastly improbable.
The best performer over the entire 90 year period was Altria. 2,000,000 times your money. Who of us would have predicted that in 1926? Who among us would have held it through the ’30s.
Don Shaughnessy arranges life insurance for people who understand the value of a life insured estate. He can be reached at The Protectors Group, a large insurance, employee benefits, and investment agency in Peterborough, Ontario. In previous careers, he has been a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business.
Please be in touch if I can help you. email@example.com 866-285-7772