So how did the stock market started?
I researched and found studies showing that the stock market started in the 17th century where dealers met to buy securities in Throgmorton Street. There are also those who stated that it started earlier in the 12th century in France. There were even arguments that stock exchanges already existed in ancient Rome. Well, we do not have a knack for history, and unless we can learn something from it, it would at most serve as an entertainment. What we want to really know is if it is really possible for anyone to profit from the stock market? Has anyone done it consistently? Are there tools and methods to enable others to duplicate the successes? Let’s find out.
Profiting from the Stock Market?
Without a doubt, we all know that there had been success stories about people profiting from the stock market.
The superstar of the century will be Warren Buffett who started investing in his first stock at 11 years old. He later learnt the method of Value Investing (a tool which we will look into further) from Benjamin Graham, the father of Value Investing, and turned an initial investment of $9,800 at the age of 22, to billions of dollars and became the top few richest man in the world.
The other well-known names would be Peter Lynch, Sir John Templeton, George Soros, Jesse Livermore, Walter Schloss and many others.
In Forbes Editor, Matthew Schifrin’s book, The Warren Buffett next door, he featured yet another 10 unheard of personnel who profited well from the stock market.
And from our personal circle of friends, clients, and students, we also know of those of are quietly profiting from the stock market. One of our friends came to Singapore from China with only enough money to help him survive until his next pay cheque but using the stock market, he turned into a multi millionaire within 10 years. Another gentleman was able to pay for his family’s lifestyle with his profits from the stock market. And of course, as we continue to improve and learn from all these individuals, we also rake in decent amount of profits in style.
Our conclusion with regard to the possibility of profiting from the stock market is that it is definitely possible if one adopts the right method and develops a supporting temperament to manage oneself in the stock market. But before we really dive into the market, here is a big warning sign.
“Most People Cannot Beat The Market!”
With this, let us show you why that is so and how you can be the few that beat the market,
Why Most People Cannot Beat The Market
When we were in school learning about the stock market, there is a very important theory that states that the market is an efficient market. It is known as the Efficient Market Hypothesis. The idea behind this theory is that share prices incorporates and reflects all relevant information regarding the share. This means that if a share is worth $10, it will be trading at $10 in the stock market. And if this is the case, then nobody can every profit from the stock market unless they have access to information faster and earlier than anyone else does. If this theory is truth, then the question is, how did those famous investors we just mentioned in the previous segment, become profitable. The reason is that while this theory is correct that the share prices will reflect all relevant information and thus be priced at what it is worth, it did not account for 2 important facts:
- How much a share is worth is subjective in the first place.
- There is a lag to which the share price ultimately reflects all information and trade at what it is worth.
At this point, you got to just bear in mind that the Efficient Market Hypothesis is not fool proof. Following this, we will explain to you why this is really so and how we can profit from it. So let’s follow us tightly.
Meet me live for more sharing,
Click HERE and join me for a Free Investing Workshop.
Mind Kinesis Research Team