Try and think about all the possible investment theories you know of and then try and name at least one that is not based on assumptions (stupid ones at that) and has not been criticized by someone or the other.That's where reality starts and authors undersigning such theories take a nap. Agreed that these theories form a firm foundation for an understanding of fundamentals but try and ask your investment advisor about the bearing of such theories on their investment decisions and they will tell you that most of the times, their best judgement overrides such theories.
I have nothing against the likes of Parot and Adam Smith but it's easy to wonder that if a third person could figure out stupid limitations to the application of their theories, being such great minds themselves, how the hell did they miss it?
I guess I will stick to the theories for the foundation bit of it only. For the rest of the structure I rather conform to what Warren Buffet says and does:
If someone suggests you a better way of doing something, first ask why he didn't do it himself?
Then ask why wasn't I able to do it?
Pour in your thoughts about theories. Do they guide you or does your brain?
3 comments:
I agree that a theory can't be absolute but it does provide you a foundation to build on...Amit.
Like a marketer would never tell you what his product lacks, people who formulate these theories also leave it to the readers to determine that....
any theory is good for defending one's mistakes and not take any risk. All the theories work in fiction and thats the beauty of it!
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