ASX Education: Knowing the unknown
In order to make any money in the stock market you need to focus on the unknown and stop wasting your time on the known. Every year the top and bottom performing stocks are not the stocks the market predicts most accurately, those stocks will hardly move, the big money is always in the stocks that the market gets most wrong.
In other words you will not make money knowing what everyone knows. You will not make money listening to an adviser telling you about consensus forecasts, PEs and yields, or calculating valuations based on accurate forecasts. All that is valueless, because it is in the price.
The only thing that will make you money is knowing what is not in the price and that means working out what assumptions the market has got wrong, not right, because...Continue Reading