Tuesday, March 22, 2011

Right for the Wrong Reasons

Is it ok to be right for the wrong reason?  That could be one definition of lucky.  It has proven itself time and time again with me in investing in the stock market.  When I listen to a program like Mad Money and Jim Cramer's logic about a particular stock pick, I'm reminded that his pick may go up (or down) for no reason even related to his logic.

The problem lies in using past correct decisions as the basis for evaluating the reason of the presenter.  If all those decisions were right for the wrong reason then you should have little confidence in their current pick.  I just finished re-watching "Two for the Money" which is about sports gambling.  What a great illustration of the right picks for the wrong reasons. 

So for all you March Madness bracket pickers - you can crow about being right for the wrong reason (yes that means you Jenna).

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