Investing For Growth
Investing For Growth
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FOOL GLOBAL WIRE EXINGTON, Kentucky (December 11) -- Is it just me or do you get steamed at the condescension of the Wise, too? When we talk about staying fully invested and riding out bad patches, we're called simpletons. When we argue that one should use simple approaches like Unemotional Value, Investing for Growth and Unemotional Growth, we're called naive. ("Nothing so simple can possibly work in this complex and efficient market. You need our help. Just a small fee, really.")
And yet who is it that panics every time some gooroo makes a comment (regardless of whether it's taken out of context or not)? You got it! Not the simple, naive individual investor who socks away money each month, buys quality stocks and updates them periodically, but always remains fully invested. No! It's the experienced, savvy, all-too-Wise institutions who have panicked in recent days.
Thursday night, Greenspan talked in general terms about the dangers of "irrational exuberance." The Wise translated the comments as, "The sky is falling! Sell everything now." Did they even look at the actual data released Friday morning, suggesting the economy's continuing to grow modestly with low inflation? No, they interpreted the remarks in a way that would have failed any freshman-level rhetoric class and ran out the door, only to come back again Monday.
Today, the Wall Street Journal's "Heard on the Street" column started a flurry of rumors that Goldman, Sachs is cutting its stock holdings (something Goldman, Sachs has denied today). What did the Wise do? Same thing as Friday. "The sky is falling again!" And what data came out today? That's right, wholesale inflation data that once again reinforces the scenario of a low-inflation, modest-growth economy. (The core rate rose only 0.1% in November.)
So you decide who the real fools are: those of us who are too simple to know better and keep investing in solid companies through all market conditions, or those who react to every rumor hitting the floor (whether true in any way or not) and run in and out of the building every other minute.
It's rich, though, for the Wise to sit there smugly on television and shake their heads knowingly about how the individual investor doesn't stand a chance against the pros, especially when this is the kind of seventh-grade reaction the pros have to "news." The Wise can keep their condescension, thank you. I'll settle for performance and obscurity.
Now don't get me wrong. I'm not steamed because the market's down; it's not so simple that you can dismiss it as sour grapes. What bugs me is that the Wise think we Fools are fools and yet they work on a basis demonstrated again over the last week to be no better than bathroom gossip exchanges.
If the reactions demonstrated Friday and today were to real data, pondered soberly, that's one thing. Call it a difference in interpretation and we move on; that's what makes the market interesting. But to panic sell and panic buy because Freddy heard Mary tell Susan that Jeff is watching Steve's portfolio allocation, and Steve thinks Alice's sentiment indicator has inverted because of comments she heard made by Roxanne in a conference call with Joe's research staff ...
Well, you get the idea. Maybe we Fools are not the ones in danger here of making silly investments. Be Foolish, for heaven's sake. |
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