When investing in shares, is more information a good or a bad thing?
- Thread starter stedyedy
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Re: When investing in shares is more information a good or a bad thing?
haha no i'm just have an argument with a friend,
I believe that having more information is a good thing when investing in shares and he says more information is irrelevant because of the Market efficient theory, and I have no studies to back up my argument.
haha no i'm just have an argument with a friend,
I believe that having more information is a good thing when investing in shares and he says more information is irrelevant because of the Market efficient theory, and I have no studies to back up my argument.
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Re: When investing in shares is more information a good or a bad thing?
Please provide me with evidence that the market is efficient.
at which point over the last month has the market been correctly valued.
Please provide me with evidence that the market is efficient.
at which point over the last month has the market been correctly valued.
Re: When investing in shares is more information a good or a bad thing?
I can not provide evidence that the market is efficient, the question is information is advantageous in the stock market or not, when investing.
I can not provide evidence that the market is efficient, the question is information is advantageous in the stock market or not, when investing.
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Re: When investing in shares is more information a good or a bad thing?
Offcourse more information is to your advantage, as long as it is information you can use in valuing the business.
The more information you have the better idea you have of what the companies position is and the better idea you have of what it is worth, this allows you to avoid over priced stock and by better businesses at fair prices.
Try googling an article written by Warren Buffett called " the super investors of Graham and doddsville"
Offcourse more information is to your advantage, as long as it is information you can use in valuing the business.
The more information you have the better idea you have of what the companies position is and the better idea you have of what it is worth, this allows you to avoid over priced stock and by better businesses at fair prices.
Try googling an article written by Warren Buffett called " the super investors of Graham and doddsville"
Wysiwyg
Everyone wants money
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Re: When investing in shares is more information a good or a bad thing?
Notice strong price moves before news on many occasions.
No wonder the average trader gets rolled in the game. It's an uneven playing field run by the suits and deep pockets.
No advantage if it is public information because everyone has access to it and will act on this information in line with their own investment strategy. Inside information has a definite advantage because one can buy or sell ahead of the herd. The herd that reacts when the information becomes public.
Notice strong price moves before news on many occasions.
No wonder the average trader gets rolled in the game. It's an uneven playing field run by the suits and deep pockets.Re: When investing in shares is more information a good or a bad thing?
if everyone act rationally and behave at all time with level headed yes but
time and time again it been proven people over-react both ways
up and down
you go and buy a dvd player for $200 bucks, then you see on the other side of town they have it for $100 bucks ... would you drive over the other side of town to get it?
in an experiment almost everyone say YES.
you go and buy a car worth $20,000, the other side of town has the car for $100 less, most people say NO to drive on the other side to get it for $100 cheaper.....
what the? exactly $100 saving either way.
is that rational? definitely not.
apply this to a stock during GFC .. FLT ... they did what good management do, preserve cash and temporary stop dividend because they are in uncharted water...the market for some reason think it's going down the toilet despite it has very little debt and make money, market sold it down to bankruptcy price of $3.39 ...go figure....
No advantage if it is public information because everyone has access to it and will act on this information in line with their own investment strategy. Inside information has a definite advantage because one can buy or sell ahead of the herd. The herd that reacts when the information becomes public.
Notice strong price moves before news on many occasions.
if everyone act rationally and behave at all time with level headed yes but
time and time again it been proven people over-react both ways
up and down
you go and buy a dvd player for $200 bucks, then you see on the other side of town they have it for $100 bucks ... would you drive over the other side of town to get it?
in an experiment almost everyone say YES.
you go and buy a car worth $20,000, the other side of town has the car for $100 less, most people say NO to drive on the other side to get it for $100 cheaper.....
what the? exactly $100 saving either way.
is that rational? definitely not.
apply this to a stock during GFC .. FLT ... they did what good management do, preserve cash and temporary stop dividend because they are in uncharted water...the market for some reason think it's going down the toilet despite it has very little debt and make money, market sold it down to bankruptcy price of $3.39 ...go figure....
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Re: When investing in shares is more information a good or a bad thing?
If you are a fundamental investor the more information you have the better.
If you think that just because information is public that everyone has read it, and everyone has reacted to it in a rational way you would be wrong.
No advantage if it is public information because everyone has access to it and will act on this information in line with their own investment strategy. Inside information has a definite advantage because one can buy or sell ahead of the herd. The herd that reacts when the information becomes public.
Notice strong price moves before news on many occasions.
If you are a fundamental investor the more information you have the better.
If you think that just because information is public that everyone has read it, and everyone has reacted to it in a rational way you would be wrong.
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Re: When investing in shares is more information a good or a bad thing?
Sound advice.
And - It is not that you HAVE the information at hand, it is how you INTERPRET and use it.
That is what separates people like Buffet vs the rest of the world. That is why I am good with particular businesses, and less good with other asset classes.
IMO, it is better to stick to your strengths, and use whatever information you have to the best of your abilities, and hopefully you outperform the herd (A VERY hard thing to do, because often the herd is stupid)
Edit - that is probably where psychology comes in handy... me, I try to avoid most people if possible.
Sound advice.
And - It is not that you HAVE the information at hand, it is how you INTERPRET and use it.
That is what separates people like Buffet vs the rest of the world. That is why I am good with particular businesses, and less good with other asset classes.
IMO, it is better to stick to your strengths, and use whatever information you have to the best of your abilities, and hopefully you outperform the herd (A VERY hard thing to do, because often the herd is stupid)
Edit - that is probably where psychology comes in handy... me, I try to avoid most people if possible.
