PRU compared to SAR, page-26

I don't know how long you guys have been investing in stocks but I am coming up on 44 years. There are a couple things I have learned.

1. 99% of people who invest don't know what they are talking about. I include so called analysts in this group. Over the years I have followed many 'experts' who make calls about share prices. Most end up being wrong. Not because of their logic but because things change - always.

2. One of the biggest mistakes made is to not see the whole investing picture. I have had more arguments over stock prices and the economy then I can remember. I just could not understand how other people could not see my logic. It was 'foolproof'!!!!! But then I realized that for a market to exist in the first place there must be different points of view. I became a better investor from that moment forward.

3. Stock prices may eventually be priced based on fundamentals but sentiment is a more immediate driver of price. Investors have many different time frames for profit. Everyone wants the price to double triple or better the very millisecond after they have purchased. But most have a time frame which coincides with their reason for investing in the stock. ie minute traders who are happy with .01%, hours traders with .1%, day traders who are happy with 1% and other s who are happy until 100%, 200$ etc. All of these points of view get amalgamated into the current price.

4. Investor sentiment on gold is incredibly fragile. I leant this the hard way. Over 4 years in the 70s my mate and myself turned $400 into $22,000. We then got greedy and decided to invest in gold futures. We chose the perfect day to do this. We ended up waking up to a loss of $22,000. Guess which day this was?

So when you watch pru and the price is not doing what you expect think about reasons that may be the case.