“Don’t tell me what you think, tell me what you have in your portfolio.”
― Nassim Nicholas Taleb from Skin in the Game
If you happened to be a stock investor, I bet you must be familiar articles like “Why Tesla stock was falling today?“ or “Why you should invest Tesla now?“. Some analyses might be brief, while others can be lengthy with paywalls. While even if you don’t have to pay for them, they are not free as it seems: the authors of these articles write to benefit themselves, not you.
In his masterpiece Human Action, Ludwig von Mises asserts that
“acting man is eager to substitute a more satisfactory state of affairs for a less satisfactory. His mind imagines conditions which suit him better, and his action aims at bringing about this desired state. The incentive that impels a man to act is always some uneasiness. A man perfectly content with the state of his affairs would have no incentive to change things. He would have neither wishes nor desires; he would be perfectly happy. He would not act; he would simply live free from care.”
The advice givers would not have written the articles if they hadn’t expected benefits from doing it. Note that the primary beneficiaries are themselves, not you.
There is an asymmetry between the authors and you. If you make profits as they suggest, it’s their contributions. They take the credits. If you lose, its’ your hard-earned money. They lose nothing except an excuse “Sorry, I didn’t expect that.” They know little about you and certainly are not on your side. There is a basic agency problem. Some writers are actually the promoters of a company. They are hired by the company to attract potential investors. Some are about to short a stock. If you rely on others’ judgement to behave, you are in great risk.
If you think further, you may realize that they have no incentives to share you their investment secrets if the recommended stocks would take off. Because the stock prices would go up if more purchases happen, which means the authors themselves would pay more for the same quantity of stocks. Only a brainless person would do that. And I certainly don’t believe these authors are stupid at all.
When you have all this information, be sure to ask yourself: why should I trust it? why they share it to me? how much I’m gonna lose if I missed it? how much I’m gonna win should I follow it? Do your homework.
Remember, no one will think for you so you have to think for yourself.