When a Stock Market Analyst or a Fund Manager chooses shares for their portfoilio they should look at a number of criteria, including: future earnings potential, present and past earnings, the quality of management and their strategies, sales and potential sales growth, innovation and creativeness, the debt of the company, cash flow, industry trends and worldwide macro-economic factors… to name a few of the important issues.

They love numbers and crunching them to get all sorts of ratios.  They look at all the aspects of the financial statements and end up creating fancy models based on future earnings, to see if the share price is over or under priced.  All very mathematical and based on supposedly sound principles…

But where has it got them?  Its still a gamble.

Sure you look at overall trends, apply some common sense etc… but buying shares on the stock market is gambling.  You can remove as much element of chance as you can, but you still gamble on whether the share price will go up or down.  Some factors are out of your control!

Highly paid people who gamble with other people’s money!!! Getting bonuses for making more money and payouts to get rid of them when things go wrong… they win on both sides of the equation!!

Maybe thats why traders look like crazed gambling addicts… they love the thrill of gambling on the stock market!