I’m conflicted. Lots of people trade individual stocks. I do. My friends do. Maybe you do. I used to dream of watching CNBC tickers, making quick trades on my PDA, getting in on IPOs. But so far, I’ve just made the occasional trade based on some loose predictions, a good story, or love for their product. But the more I read, the more I think – why bother at all? The average active mutual fund manager cannot beat the market over time. These people have finance degrees, experience, lots of underlings, and I’m sure some smidgen of intelligence for them to be managing millions of dollars in capital. I don’t see myself as any better.
So my question is – why do you do it? Is it entertainment value? Maybe you work in the industry so you know it better than the managers? Do you believe the articles from a $5 subscription to Forbes are actually cutting edge advice? Maybe everyone else just didn’t read enough Benjamin Graham or Berkshire Hathaway annual reports? What makes you think that you can beat the market? Even though I used some sarsasm back there, I really do want to know.
By Jonathan Ping | Investing | 2/22/06, 11:15pm