Saturday, July 13, 2013

How to get rich by following the media.

Article based on Great prophecies of the media, by Francisco Toledo.

Let's talk a little about the information we received about stock markets.

It seems good to have plenty of information, so lets take an initial look at the financial press, and how it can help us to invest in a safe way our little savings...

To begin with, let's look at the some covers of newspapers, starting some years ago on October 22th, 1929, just 2 days before black thursday, the D-Day in 1929 crisis.

It is well known, everybody could become rich just putting a few bucks in Wall Street.., or maybe not.., but experts didn't hesitate giving ONE advice, BUY.

I recommend reading that article, even more now that we know what happened..., also the one at the left, about opening craniums with saw instead of hammer for brain surgery..

Later, in 1979, Business Week magazine published that stock markets were dying. After some years where stocks didn't grow much, with increasing inflation after petrol crisis in 1973. 

Here it is the cover in detail:

The thought behind this cover was that stagnation in markets growth lead people's money to monetary funds and federal and municipal bonds, so, forget stocks...

After a couple of years stock markets started a rally that lasted until Dot-com bubble exploded...
We could find plenty of similar examples, just need a little googling.. For example, more recently, after first correction in the markets in may 2012 after the crisis, Financial Times repeated title of Business Week, The Death of Equities, do journalists like that sentence that much??

Of course, history repeats, now just maybe at higher speed...

And these days, some covers publish Dow Jones at 16000, or even further, nothing can stop us now, yes we can, etc....

So, covers are never wrong, put your money in stocks, Dow goes to 36000!!!!!

Or not?

Don't dismiss this topic as if you think it has nothing to do with you.., where do you think your pension fund is? In most of cases in funds lead by mediocrity principles, following the crowd, that follows the media.

There is even a trend in investing that basically follows the media, and other published data, to do the opposite, contrarian investing.