The Mass Misinformed

I am reading "Creating Wealth" by Robert Allen and the 1st page wrote about this message that I think is very true, yet most people don't see it as a problem in the present society. Quote Josh Billings "The trouble with people is not that they don't know, but they know so much that just ain't so."

In this age that we live in, information is "fast and furious". Information flows continuously and is available to anyone with a computer. The old school of thought often taught us to enrich our minds with more information. Yes, I do agree but when you do find information, please filter the good and bad information before depositing into your mind.

In terms of investments, a lot of people i know "invest" on the basis of heresay. They listen to their guru friends, listen to so-call stock experts on TV, newspapers and magazines on their tips to the next growth stock or a fund. To me, I do listen or read such reports, but with a lot of salt. I do agree with some experts when they say that if the news get printed or go on air, it's old news. Furthermore, one can also see that a lot of the experts and "investment houses" are just going with the flow of the market. When it's a bull market, just pick any stock and says it's good and more than likely, the price do go up. But once the price start to nosedive, these "experts" will suddenly change their tack and give all sorts of excuses.

We do live in the information age and due tot he massive inflow of information we receive every day, we are bias towards a certain direction, no matter if it's true of false. For example, for the 1st half of 2007, the construction sector here was a massive boom and the prices of all construction companies shot up to their highs. But if you do some simple calculations, the prices are unsustainable. Some stocks were trading at >100X P/E, when it should be <30X. But due to the positive inflow of information from all medias, this sector was the darling of everyone.

It is not what we do not know. On the contary, we do know a lot, sometimes too much. Most importantly, it is what we know that is not true or inaccurate. We base our decisions on what we know and if what we know is not true, we make the wrong decisions.

Think I really have to filter the information i get everyday.