AD and Jerome, this article is priceless "The Man Who Knew Too Much"...
By Jonathan Hoenig
September 6, 2001
WHETHER IT'S FROM friends, colleagues or the endless stream of televised talking heads, the more analysis I hear, the worse I trade. We all want to be informed investors, but I find that constantly hearing opinions on the market is more of a hindrance than a help.
In fact, as strange as it may seem research, inquiry and due diligence aren't always what they're cracked up to be. As with anything else in trading or life, there can be too much of a good thing.
When buying a stock, some people evaluate the economic fundamentals. Others check the charts. Some survey the "experts" or watch what the supposed "smart money" is doing.
As I've written before, once I've bought a stock I systematically avoid any news or research reports about the company. It's tempting to seek validation from others about our own positions, but I have found listening to anyone or anything besides the market itself to be a dangerous proposition. Unless you want to be constantly second-guessing your judgment, take your cues from the military: Don't ask and don't tell. Trading is tough enough as it is without a squadron of armchair critics squeaking in your ear.
For example, when I am foolish enough to tell colleagues that I bought some Sun Microsystems (SUNW) last week, I get nothing but grief! Don't you know Jim Cramer is bearish on tech? they ask me. Or that Abby Joseph Cohen is reducing her estimates on the S&P 500? Don't I know that price/earnings ratios are still at astronomical levels, or that Arch Crawford thinks that the Nasdaq will crash now that Saturn and Neptune are experiencing solar storms?
Spare me! Does a big-shot analyst know where Sun is going simply because he went to Wharton, has a closet full of Armani suits and drives an Audi TT? Absolutely not! Heeding the constant chatter of know-it-alls is a sure way to begin second-guessing your own ability. You won't just drive yourself broke...but crazy as well.[snip]
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