Facts versus Opinions – Are you Confused?

“Gold is now at 1250.60″
“Dow Jone Index at all time high of 16,086.40″
“Oil trading at 92.72, very cheap now”
“Financial Moves You Should Make by New Year’s”
“I Bonds Pay A Higher Fixed Rate Than EE Bonds”
“U.S. stocks advance modestly at the open”
“How to profit from the commodities ‘bounce'”

I am confused! Should I buy or should I sell or should I do anything at all?

Each and everyday, we are bombarded by numerous messages from the newspapers, television and now the mobile apps. Some are facts and some are opinions.

What is a Fact?

Simply put, a fact is a concrete figure, and it is something that has already happened.

For example, the price of gold is 1250.60 now. There is nothing we can dispute about it. Another example, is dow jones index at all time high of 16086.40. This is obvious in the chart and compared to all historical values.

What is an Opinion?

An opinion is the result of a person’s viewpoint. It is colored and biased,  based on the person’s experience and internal representation of the fact.

For example,  if oil is trading at 92.72, it is neither cheap or expensive. If a person has bought at all time-high of 150, it would be cheap. If another person has bought at 50, it would be expensive.

If a person has not bought oil yet, we can say he is neutral, and he can present both viewpoints. It is interesting to note that most financial reporters fall into this category and in practical sense, they would have more to write and in either case, they would not be faulted into providing the wrong opinion.

I am a trader and whatever is written on this website represent my opinions. There could be no obvious logic to how I arrive at my opinion. A trading decision is a series of conscious and unconscious decision-making.

End of the day, only my equity curve tells me whether I am right or wrong.

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