October 6, 2010

Ninguém pode prever o futuro

From IBD
Benjamin Graham, the father of value investing, in 1963: "The last time I made any stock market predictions was in the year 1914, when my firm judged me qualified to write their daily market letter, based on the fact that I had one month's experience in Wall Street. Since then I have given up making predictions."
Peter Lynch, the fund manager who delivered a 29% average annual return while guiding Fidelity Magellan from 1977-90: "Nobody can predict interest rates, the future direction of the economy, or the stock market. Dismiss all such forecasts and concentrate on what's actually happening."
Jesse Livermore, who made millions in the crash of 1929 by shorting stocks: "Don't anticipate market moves with your hard-earned cash. ... the successful speculator must abandon his predictions, and follow the action of the market."
William J. O'Neil, IBD's chairman and founder, who made a 2,000% return in 26 months early in his career: "The key to staying on top of the stock market is not predicting or knowing what the market is going to do. It's knowing and understanding what the market has actually done in the past several weeks and what it is currently doing now."

Warren Buffett, a disciple of Graham: "We've long felt that the only value of stock forecasters is to make fortune tellers look good."

John Neff, who over three decades guided the Vanguard Windsor Fund to a 14% average annual return: "I don't read, much less follow, the valuations or predictions. I studied the numbers."

Ralph Wanger, whose Acorn Fund delivered a 16% annual return from 1977-2003: "If you believe you or anyone else has a system that can predict the future of the stock market, the joke is on you."

Despite this sound advice, some investors insist on trying to predict the future. Pundits feed this mentality by gushing over the genius who accurately predicted the last big turn. Few ever stop to wonder why the genius has a different name in each successive cycle. (The reason is called luck.)

Finally, you might consider this gem from Gerald Loeb, author of "The Battle for Investment Survival," a 1935 classic: "The action of the market itself can be expected under most circumstances to stimulate buying or selling in a manner consistent enough to allow reasonably accurate forecasting of news in advance of its actual occurrence."