I was quite taken with this little analysis of what doesn't work in making money in the stock market by 'The Stock Surfer.' The problem is obviously the same problem as predicting the future in general: technical analysis doesn't work, expert analysis is unreliable... Not to say there is no hope. Just that a lot of what is out there as 'knowledge' is an unsound basis if not downright dangerous to make decisions on. (How to judge foresight quality is a theme of Future Savvy.)
Excerpt: "I used to eat (articles) up but I'm now much more skeptical of any analysis, no matter how well reasoned. The unfortunate reality is that most of the reading I've done has provided me with very little tangible result. The market seems more and more like an irrational gamble. I'm not trying to be a downer here, I'm just trying to think clearly about how to manage money responsibly. Let's review the ways:
"Buy and Hold: Doesn't work. Based on the myth that markets go up over "long" periods. The data is skewed by a bubble in the 90s we're still paying for. The S&P 500 is right where it was in April of 1998, and is down by 1/3, yes 30%, from it's high. I don't know anyone who has retired thanks to the market.
"Technical Analysis: I've learned a dozen different systems, none of which are very reliable.
"Fundamental Analysis: Doesn't work. Based on the myth that a stock is a rational representation of a business. Involves predicting the future based on past results and growth rates.
