Stock market prediction experts

The experts are always wrong in the stock market.  Do not listen to the experts they are the worst predictors of the stock market.

Buffett the prognosticator

Buffett often makes public statements about the economy and industries. I have always take them with a grain of salt. Even though he is one of the richest men in the world, it does not mean he is a great prognosticator. In fact, I have seen people get burned who I think were following his words like gospel.

Insurance industry and Buffett

Warren Buffett has recently made some comments about the insurance industry. He basically said, because premiums are getting to be so high, there is always a possibility that politicians will call for nationalization. He said he does not think this will happen but it is a possibility.
Insurance industry and price competition

I am very curious were the insurance industry will progress. Investment losses have been horrible and insurers are trying to now make money on their core lines of business, being more focused on niches in many cases, like WTM or White Mountains insurance. However, with all company’s suffering in the last few years it will be interesting to see how this all plays out. I think insurance companies are now shy of the stock and even bond market, and therefore will have increasing price competition.

I do not think Buffett’s predictions are a good way to make money. In fact at this juncture I would do the opposite of what he says.
Stock market investing -> do not listen to Buffett

Do not listen to Buffett. He likes to make big statements that everyone listens to. He has been wrong many times. I think he made is money by leveraging assets from insurance companies rather than being a working guy investing his disposable income.

Stock market investing that works

* Turn of the stock market news. Turn off all the news and do not read the experts.
* Find the trend in the market using the 1 year moving average on the S&P. If you did this you would have jumped out of the market in 2007.
* Find companies you like that are making money today. That is strong cash flow and earnings today. Do not buy stocks on expections and future promises. These rarely work. Find a company making money today and you personally think it is a good company and would do well. I also like high dividend yield stocks.
* Use a discount stock broker, I use Scottrade for example.
* Buy and hold until you make more money in your day job and can buy another company. When you have at least 7 stocks in your portfolio you can think of buying more of the same companies you already own.

This is very reasonable investing advice for the stock market. However, the first two points are the most important. That is do not listen to the experts/news regarding stock market investing and look at the market trend. If you did this you would be sitting in cash while the whole world is feeling the bite of this stock market investment crisis.

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