Wall Street Institutions pay billions of dollars annually to convince the
investing public that their Economists and Analysts can predict future price
movements of both the overall Stock Market and specific company shares. Their
predictions are often disguised in “Wethinkisms” or “Model Asset
Allocation”
adjustments, and self-deprecating investors everywhere scurry about transacting
with every new iteration from the oracle(s) of Wall Street. “These guys
‘know’
this stuff so much better than we do” is the rationale one hears from the
fool in the street. What if its true, and these pinstriped super humans can
actually predict the future, why would you do what you did in response to that
particular prediction? Why would financial professionals of every shape and
size
holler “sell” when prices are expected to move lower, and vice versa? Isn't
that the call to the mall? (Incidentally, not one Institutional Guru ever
doubts the basic truth that both the Market Indices and Individual issue prices
will continue to move in both directions, unpredictably, forever. Hmmm, this is
where you need to focus.)

Let's pretend for a moment (and that's really much too long) that broad
market movements are somewhat predictable but, for once, let's try to remove the
very human emotions that a consensus directional agreement produces. Regardless
of the direction, Wall Street advice will always attempt to fuel the operative
emotion: greed or fear! Wall Street's retail representatives (stock brokers,
and self-directors) never go against the grain of the consensus opinion…
particularly the one projected to them by their immediate superior. You cannot
obtain independent thinking from a Wall Street salesperson, it doesn't fill up
the
Beemer. Sorry, you have to be able to think for yourself. Here's some
“global”
advice that you will not hear on “the street of dreams” (and don't get all
huffy until you understand what to buy or to sell as well as when): “Sell into
rallies.” “Buy on bad news.” “Buy slowly; sell quickly.” “Always
sell/buy
too soon.” Oh yeah, if you weren't taking profits this past week, you need to
rethink your approach to the stock market…or is it because you are in Mutual
Funds?

Predicting the performance of individual issues is a totally different ball
game that requires an even more powerful crystal ball and a whole array of
semilegal and completely illegal relationships that are mostly self serving and
useless to investors. But, again, let's pretend that a mega million dollar
salary and “industry recognition” as a superstar creates Star Trek quality
prediction capabilities…I'm sorry. I just can't do it! The evidence against it
is
just too great, and the dangers of relying on analytical opinions too real.

Investing in individual issues has to be done differently, with rules,
guidelines, and judgment. It has to be done unemotionally and rationally,
monitored
regularly, and analyzed with performance evaluation tools that are portfolio
specific. This is not nearly as difficult as it sounds, and if you are a “
shopper” looking for bargains elsewhere, you should have no trouble
understanding
the workings of the stock market. A degree in rocket science is just not a
requirement, and if you are at all familiar with the “retailing” business,
you
have the equipment you need for stock market success.

Wall Street sells products, and “they” will spin reality in whatever manner
they can to make you react with transactions. The direction doesn't matter to
them and wouldn't to you if you had a properly constructed portfolio. Learn
how to deal unemotionally with Wall Street events and shun the herd mentality.
And, one more time, if you weren't taking profits this past week, you need to
rethink your approach to the stock market.


Steve Selengut
steve@...
800-245-0494
-----------------------------------------------
Author: "The Brainwashing of the American Investor: The Book that Wall Street
Does Not Want YOU to Read"


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