I know absolutely nothing about investing in the stock market. If I had to choose, I’d pick companies I felt had strong leadership, a product I liked and a good CSR track record. I would not buy shares in companies I disliked, let alone hated.
However, it appears this logic (to which I am sure many others subscribe) is flawed. We should - according to Scott Adams (the man who created Dilbert) be buying shares in companies we hate. (Which for many people right now means BP)
I won’t repost the whole article as that’s just cheeky - but here’s the kicker:
If you buy stock in a despicable company, it means some of the previous owners of that company sold it to you. If the stock then rises more than the market average, you successfully screwed the previous owners of the hated company. That’s exactly like justice, only better because you made a profit.
Don’t you just hate it when logic makes you do something you don’t want to do, but can’t disagree with?
Read the whole piece here.
Scott also evaluates the other methods of picking investments and includes this brilliant summary of how I see the whole of stock market investment:
“Technical analysis involves studying graphs of stock movement over time as a way to predict future moves. It’s a widely used method on Wall Street, and it has exactly the same scientific validity as pretending you are a witch and forecasting market moves from chicken droppings.”