Don't Invest Like These Experts (at Motley Fool)

Any finance class will quickly teach you that the speed with which efficient markets absorb public information makes it nearly impossible to find a bargain stock. This notion, fittingly dubbed the "efficient markets theory," is the philosophy driving many committed index investors. But how do the teachers feel about this bit of wisdom? A research paper recently covered at CNNMoney.com surveyed finance professors, finding that many took their own teachings to heart. About two-thirds didn't try to beat the market, investing instead in index funds, and steering clear of picking individual stocks. Almost 15% had never purchased a single stock! But a minority of these professors, the active traders, did pick stocks, and did try to beat the market. However, rather than using the sophisticated models and theories about risk and... [read full story]