Why you shouldn’t take stock tips from BNN, CNBC, Jim Cramer’s Mad Money, your taxi driver, your friend who understands finance, or the guy who sexually abuses hair gel at the gym.

“Yo guy, GUY, bro, guy, broguy, I’m telling you guy, you gotta buy Apple. The iPhone maaannnnnn, the iPhone is killing it! Before it was at 100 now it’s down at 60 it’s for surezies goin back to 100 bro.” That took me like 15 minutes to type ‘cause I kept having to go vom during it. You hear this type of shit everyday; at the gym, on TV, on google ads, on finance sites, at your local crack den, etc. It’s the belief that because of ONE specific thing THIS specific stock is going to go to THIS specific value stamped it no erasies.


Stocks are not like math equations, chemistry, or “blowjob?” meaning there is no definite answer and this kind of absolutism is absurd. Everyone is making an educated guess at the “underlying value” of a stock that is influenced by a bajillion factors from; interest rates and investor sentiment to inflation, prices of inputs like oil (ISBA: Factor prices), foreign and domestic economy, debt crises overseas, and on and on and on. Bottom line: unless you have inside information or are manipulating the market it is impossible to know with confidence what any given stock is going to do. The best someone can possibly do is: “based on these factors, holding everything else constant, if the market responds normally, this stock MAY go to this price eventually.”

Yaaawwwwwwn. Who the shit is going to click on a link that says “possible slightly above average gains if market predictions are accurate and all other factors remain constact” when they can click on a link that says “THIS STOCK IS GOING UP 1000% GUARANTEED !! SECRET FORMULA!! BEAT WALL STREET!! FREE HANDYS FROM HOT CHIXXX!!” The point is that responsible financial analysis with a discussion of the downside risks doesn’t sell, guarantees, promises, and healthy doses of unsubstantiated shaiza sell.

There is a theory out there that many of the financial equations and subsequent theories are based on that is called the theory of market rationality…hey HEY! WAKE UP! Theory time will be quick I promise. This theory says that the market is made up of perfectly rational people investing perfectly rationally, everyone is perfectly diversified and taking the exact amount of risk they can handle, and if something changes with a company or economy the market will adjust to it gradually in a perfectly rational manner………. WTF? Instead what we see in the market looks like Tortuga in the 17th century, just pirates swingin off chandeliers everywhere,swearing and pillaging shit. If they even catch a glimpse of rationality you better believe it’s gonna be raining fists all up in this humpty bumpty. So what do these swarthy fellows in the market mean for you? You could have the best researched plan in the world, know the shit out of the fundamentals for a stock, have done a complete macroeconomic analysis, pick your exit strategy, tip toe into the market and “YAAARRRRRRRR”….. you’re fucked, because of something completely out of your control that you or anyone else could never have seen coming.

I paint a grim picture to illustrate a point; the market can stay irrational and fucked up longer than you can stay solvent. There are no shortcuts in investing, if it seems too good to be true it is. Stay away from investing based on advice from chuckys who haven’t done their research. Even if it’s a “financial reporter” or whatever on BNN or CNBC, look at the company yourself before doing anything don’t take their word for it. There is no reason for buying that can be explained fully in 5 minutes. If anyone truly did have a miracle stock, why the hell would they tell you about it? If you don’t have the financial wherewithal to at least basically evaluate a company yourself then DON’T PICK STOCKS. Stay diversified, invest long term, and for god’s sake tell that greaser at the gym to shooosh about Apple….. or just think about it and tell people you did afterwards….he is pretty jacked….