I am typing this as I sip my morning coffee, read the newspaper and visit investagrams and facebook groups about value investing in the Philippines or trading in stocks. And on the back of my mind I realised, “man, there’s a whole lot of garbage information”.
Most people think that having more information will make them a better investor. Look at the mutual fund industry. Fund managers, analysts have access to information not readily available to most investors. But yet, they underperform the index. Why is that?
The human mind is not capable of processing huge amounts of information blasting second by second. The brain can only handle so much before it tries to jump into conclusions to make the processing easier. The brain takes a shortcut into emotional decision making when bombarded with so much data. And information that passes will be ignored only to the point where its interesting to the looker. Which means, there can be bias. You look for things that you yourself is biased on.
And there’s simply a lot of information and its hard to distinguish which ones are genuine. Take for example, anyone who can install a blog software on their website can actually publish their opinion for the world to see. Yes, like me. Add to that, the raging apostles of a certain investing discipline preaching on social media, can add to this garbage. Shall we add YouTube? There’s a lot of youtube videos with regards to investing. Made by people who have no track records and use complicated charts and terminologies to sound smart.
Sigh… Perhaps there is no other way. The Philippine investment world is full of chartist. On the other hand, the investment community is full of religious zealots who thinks one should follow a leader into a stock. Or worse, financial advisors teaching investing. Gasp!
There’s really no way into this. You have to follow the off the beaten path. Eagles don’t flock. You really have to do this yourself. Meaning, any opinion or investment thesis you have should be coming from the person in front of the mirror. I am training myself that if someone starts talking about resistance, support or volume, I immediately leave. You have to protect your mind from such garbage. Its not that important. Tune it out. Let only the best ideas flow in. Read books. Reflect on it. And make your own decisions.