
Sometimes it’s really tough to spot someone that doesn’t know what the hell they’re talking about because they’re just really good at hiding it.
But other times it’s so damn obvious it drives me crazy. Take investing—if you’re totally ignorant about it then you can always go to the well with stupid, generic phrases that you don’t really understand but that you hope will give off the right mix of knowledge and prudence.
“Buy low, sell high.”
Every time I hear this I think to myself: “Shut up you ignorant newbie.”
Why does this make me so angry? Because they don’t understand the complexity behind what they’re saying. They think that “Buy low, sell high” is a solid piece of responsible, investment advice. A nugget they can repeat at cocktail parties to sound smart, sensible, and in-the-know (it’s right up there with thinking a stock is “cheap” because the price is “low”).
Almost akin to the most important idiom of personal finance, “Spend less than you ear,” which no one can really argue with.
But “buy low, sell high” makes you look like a total douche because only a speculator believes it. If you’re spouting this left and right, then you’re claiming a whole bunch of stuff you probably don’t even understand.
Like market timing. Which, by the way, is impossible for those of you still listening to cassette players and waiting for MC Hammer to put out another great track. Market timing is bull****—it can’t be done by anyone, regardless of how powerful their computers are or how much experience they have in the market.
You cannot time the market, NO ONE CAN. So how do you expect to put your digestible, easy-to-spout phrase into practice?
“Buy low, sell high! Right guys?”
No. Wrong, guys.
When is low? Was it a month ago when the S&P dipped under 1,000?

Or was it a month later when the S&P plummeted even further down?

Same thing goes for the “high.” No one knows when it is, so shut your trap and stick to what you know, which is obviously not investing.
And to those of you starting off in the world of stocks, I give you this little nugget of advice: if you hear someone repeating this over and over again, they are full of crap. Call them out on it. Ask them when the low is and when the high is and how they know.
If they give you a bunch of valuation metrics, then they might actually know something (even if they’re still wrong). If they blabber on and on about investment basics and principles, they have no friggin’ clue.
Ahem.
I don’t want to just rant and rave here with nothing useful or positive to say, so here’s my advice to those who admit they don’t know enough about the market and even you—yes, you—the person who spouts “buy low, sell high” without realizing how angry you make me and how ignorant you make yourself sound.
Learn.
Read The Intelligent Investor. Read One Up on Wall Street. Read Stocks for the Long Run. Devour everything in Morningstar’s Classroom series. Check out About.com’s section on Investing 101. Read Yahoo Finance and MSN Money every day.
Start paper trading stocks to get a feel for what it’s like to watch a stock without risking your money.
Go out there and learn the meat of it, and ignore the fluff. It’ll make you a better investor and it’ll help keep my blood-pressure down…