The Four Stages of Investment Knowledge

6/21 - " We’re in a dead spot, a lost decade; old certainties are being tested, and many clever investors (alas for Bill Miller) are being weighed in the scales and found wanting.

This is actually a good time to become an investor, because it is a bad environment. You develop your skills when expectations are low, and the battle is tough. But you have to confront the four stages of investment knowledge."

"Stage one is being puzzled, and knowing that you don’t know much. There is extreme caution and risk avoidance, and so much of the market appears to be random. But with some drive, there is a desire to learn, and that leads to stage two.

A little knowledge is a dangerous thing. It can come in the form of articles like “Ten Best Stocks to Buy Now!” or “The Simple Formula That Beats the Market, in One Tiny Book.” Whatever...Stage Three is the rare point, beca...