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Over the last 20 years, investors have increasingly come to regard investing in stocks about the same as putting money in the bank except they got a higher return. This belief became so pervasive that, as recently as 2000, the government in Washington was still talking about putting part of the Social Security account into securities in order to earn a higher return. After the Nasdaq crash, that plan was quietly dropped. Even investors who researched stocks before buying them either mostly used computer programs that rely on past action repeating more or less exactly in order to predict future buy or sell points, or they used Internet advice which in many cases was nothing more than thinly disguised sales pitches. There is an old adage which says that knowledge can be communicated but wisdom has to be self-taught. I hope that, you will have enough knowledge to evolve your own market wisdom. With the coming of the Internet, investors were so focused on acquiring the latest information on securities that many never bothered to learn how that information could be best used. And just as many of us have lost the ability to spell correctly or do simple arithmetic because we rely on spell checks and computer calculators, so investors who rely only on the Internet for investment know how have never had to learn the basic signals to judge where markets will go next. Even more dangerous is the assumption that prediction is a scientific process, whereby if you have the right piece of software that correctly predicted market turning points in the recent past, it would certainly be able to predict the future. Until the mid-1990s, analysts on financial news programs did useful research and offered informed opinions of where markets in general and specific stocks were likely to go. But increasingly over the subsequent years those same analysts concentrated ever more on being entertainers, as all business news programs became little more than infomercials for their advertisers. The focus became less to seriously inform and more on keeping the viewer watching so the advertisers would have an audience.
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