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December 2, 2014

Jonathan Tobin: Defending the Right to a Jewish State

Heather Hale: Compliment your kids without giving them big heads

Megan Shauri: 10 ways you are ruining your own happiness

Carolyn Bigda: 8 Best Dividend Stocks for 2015

Kiplinger's Personal Finance editors: 7 Things You Didn't Know About Paying Off Student Loans

Samantha Olson: The Crucial Mistake 55% Of Parents Are Making At Their Baby's Bedtime

Densie Well, Ph.D., R.D. Open your eyes to yellow vegetables

The Kosher Gourmet by Megan Gordon With its colorful cache of purples and oranges and reds, COLLARD GREEN SLAW is a marvelous mood booster --- not to mention just downright delish
April 18, 2014

Rabbi Yonason Goldson: Clarifying one of the greatest philosophical conundrums in theology

Caroline B. Glick: The disappearance of US will

Megan Wallgren: 10 things I've learned from my teenagers

Lizette Borreli: Green Tea Boosts Brain Power, May Help Treat Dementia

John Ericson: Trying hard to be 'positive' but never succeeding? Blame Your Brain

The Kosher Gourmet by Julie Rothman Almondy, flourless torta del re (Italian king's cake), has royal roots, is simple to make, . . . but devour it because it's simply delicious

April 14, 2014

Rabbi Dr Naftali Brawer: Passover frees us from the tyranny of time

Greg Crosby: Passing Over Religion

Eric Schulzke: First degree: How America really recovered from a murder epidemic

Georgia Lee: When love is not enough: Teaching your kids about the realities of adult relationships

Cameron Huddleston: Freebies for Your Lawn and Garden

Gordon Pape: How you can tell if your financial adviser is setting you up for potential ruin

Dana Dovey: Up to 500,000 people die each year from hepatitis C-related liver disease. New Treatment Has Over 90% Success Rate

Justin Caba: Eating Watermelon Can Help Control High Blood Pressure

The Kosher Gourmet by Joshua E. London and Lou Marmon Don't dare pass over these Pesach picks for Manischewitz!

April 11, 2014

Rabbi Hillel Goldberg: Silence is much more than golden

Caroline B. Glick: Forgetting freedom at Passover

Susan Swann: How to value a child for who he is, not just what he does

Cameron Huddleston: 7 Financial Tasks You Should Tackle Right Now

Sandra Block and Lisa Gerstner: How to Profit From Your Passion

Susan Scutti: A Simple Blood Test Might Soon Diagnose Cancer

Chris Weller: Have A Slow Metabolism? Let Science Speed It Up For You

The Kosher Gourmet by Diane Rossen Worthington Whitefish Terrine: A French take on gefilte fish

April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review May 17, 2006 / 19 Iyar, 5766

How could the TV experts be so wrong?

By John Stossel


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http://www.JewishWorldReview.com | Stocks go up and down, but eventually, most go up. So if you invest and hold on, odds are you'll do quite well. As my former Princeton economics professor, Burton Malkiel, told me, "The stock market is like a gambling casino with the odds in your favor. Over the long pull, it beats inflation, and beats it by a great deal."


If you want to beat other investors, too, it's logical to think that you should turn to the most visible specialists for advice. These men and women make their living studying stocks, and they sound so confident on CNBC. You'd think they could beat the market.


Don't bet on it.


"Most of the guys on TV — they're not that good," said JWR contributor Jim Cramer. He should know: He's all over the place talking about investing — CNBC, CBS Radio, the Web, bookstore shelves, and New York magazine. Cramer told me that he is different from other stock-pickers because he has no hidden motives.


"A guy comes on TV," said Cramer. "Thought process at home: 'There's a person who has looked at the whole industry and is making judgments about what are the best stocks.' Wrong! Wrong! The worst are guys who say that they love a stock and they're selling the stock. That happens all the time."


Then there are the guys who pump the stocks of companies with whom they're doing business.


CNBC's "Guidelines for Appearances by Financial Professionals" now require its experts to tell it, so it can tell you, about any ties they have to the companies they discuss. But even the scrupulous expert, the one who's not touting his friends or customers, is unlikely to give you much of an edge.


"I ended up losing just over $40,000," trailer park manager David Talevi told "20/20." That was a year's salary for him. He lost it buying stocks they recommended on TV. "You just took their word for granted," he said. "I figured, you know, 'This thing is going to take off.'"


"This thing" crashed instead.


How could the TV experts be so wrong? They are well-educated people who call and visit individual companies, and study the balance sheets, new products, and marketing techniques. They work at this full time. You'd think this would give them an advantage. But it doesn't, Professor Malkiel said, because what they learn is information all the analysts have. Malkiel wrote a book about the process called "A Random Walk Down Wall Street." He studied stock movements of the past, and concluded that the advice produced by the in-house experts has little value. "Most of it is just absolute nonsense," he told me, "and most of it is really designed to get people to trade more than they should."

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The brokerage firms want you to trade more, because they charge a commission on every trade. But year after year the trading advice that comes out of most of the big brokerage firms is no better at selecting winners than throwing darts at the stock table, or having a monkey throw darts. In fact, the advice is usually worse! People who chart the brokerage firms' recommendations said that over a 15-year period ending in 2005, only 5.72 percent of actively managed mutual funds had beaten the 500 stocks that make up the Standard & Poor's Index. In other words, 94 percent did worse.


None of the big brokerage firms would talk to me about their failure to outperform dart-throwing monkeys, so I interviewed successful money manager Robert Stovall. He used to run research departments at EF Hutton and Dean Witter Reynolds, and he told me just when the experts are useful.


"Everybody has a boss," he said. "Professionals won't buy Coca-Cola or some other stock unless they have reports in the file produced by well-known analysts so if something goes wrong with the stock they buy, they can show their boss, 'Hey, I've got a big file on this stock. All these analysts said it was a good one. Something went wrong.'"


So go ahead. Follow an expert. Then, when something goes wrong, you can blame him.


But if it's your money at stake, you'll probably do better with an index fund — or a monkey.


Bananas are cheaper than brokerage fees.

Every weekday JewishWorldReview.com publishes what many in in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.

JUST OUT FROM STOSSEL
Myths, Lies and Downright Stupidity: Get Out the Shovel --- Why Everything You Know Is Wrong  

Stossel mines his 20/20 segments for often engaging challenges to conventional wisdom, presenting a series of "myths" and then deploying an investigative journalism shovel to unearth "truth." This results in snappy debunkings of alarmism, witch-hunts, satanic ritual abuse prosecutions and marketing hokum like the irradiated-foods panic, homeopathic medicine and the notion that bottled water beats tap. Stossel's libertarian convictions make him particularly fond of exposes of government waste and regulatory fiascoes. Sales help fund JWR.



JWR contributor John Stossel is co-anchor of ABC News' "20/20." To comment, please click here.


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