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Navigate the Noise

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Navigate the Noise

Investing with One of Wall Street's Top Investment Strategists

Wiley,

15 min read
10 take-aways
Text available

What's inside?

The best investors buy in silence and sell into noise.

Editorial Rating

8

Qualities

  • Innovative
  • Applicable

Recommendation

The more information a market provides the more efficiently it will operate, right? Well, in theory that’s so. In fact, market transparency has been a top goal of financial regulators in the U.S. for decades. But is it possible to have too much information? Richard Bernstein makes a compelling argument that not all information is good information. Noise - the deluge of 24-hour news coverage, constant cable TV market-chatter, continuous Internet feeds and barrages of electronic updates - is a danger to most investors, who lack the resources to separate the accurate from the spurious. This book is a Godsend for investors who think - usually mistakenly - they can make sense of it all. Bernstein tells you how to cut through the noise by focusing on long-term investment plans, diversifying and clearly assessing risk. getabstract recommends this informative book for its crisp, personal style, and for its practical approach to bringing some peace and quiet to your portfolio.

Summary

The Information Explosion

Because there is so much information available today, the key to knowledge is not content, but the ability to sift through a huge amount of data. Investors encounter mountains of information daily and must discern just which information is really relevant. The explosion of information can cause bad investment decisions. Whether you get informed through rumor, gossip, chat rooms, notions about stock price momentum or other sources, you are more likely to be swayed by such information than you are to truly understand what is happening. You are better off with traditional, more accurate investment methods, such as strategic planning, fundamental research or risk analysis, all within a disciplined investment approach.

Increasingly, people are getting sucked in by all of the noise, much of it due to the new technology. However, if you examine the actual performance of investment portfolios, you will discover that present results are no better than the results produced before these technologies. In many cases, the later results are even worse. In fact, it is dangerous to think that you can invest on your own and make sense of all of today’s investment...

About the Author

Richard Bernstein is a quantitative analyst at a major Wall Street firm. He developed a stock selection model based on analysts’ earning estimates, which he has been running since 1989, and back-tested it to early 1986, to provide a very effective model for selecting stocks. Using data that is updated monthly, it has produced long or buy portfolios that have consistently out-performed the overall market, while its short or sell portfolios have consistently under-performed the market.


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