I gotta tell Warren Buffett how he is screwing up.

Well, what do you know... the first sentence comes with a link to Hebner's firm. How much did he pay Daily Ticker or Yahoo Finance to post this adver... I mean article?

Peter has published a number of books, ALL considered excellent, down to earth and reasonable! Peter did not use options! No derivatives! Peter like Buffett did not invest in things he did not understand. He visited the company, the facilities, talked to management. Peter's results over twenty years speak for themself!

Mark Hebner is a pushing his index view. WOW! Great innovation there! Why listen to this guy? Bogle invented indexing. Read Bogle! Any reasonably intelligent investor can select a diversified portfolio of index funds as Bogle recommends, keep costs low, and do fine based on history.

There are great managers who like Lynch in his day deliver above average returns. These great managers and their funds are easily identified. Get informed, do your research, follow your comfort level, make a plan and follow it. Vanguard Index Funds and ETFs are great low cost products. Your choice. WHy does ANYONE pay a load today? But many do with sky high cost and poor results.

The fact is most Americans save little, they spend more time researching a new flat panel TV than their investment choices. Most do not have a will. Americans fail financial planning 101. It is not that hard. And the wolves in the financial world get fat on the sheep.

You would think if Peter Lynch had some secret to beat the market, he would have passed it on to his successors. Maybe he just wanted to keep it to himself, because none of his successors came even close to his record.

Another EMH (Efficient Market Hypothesis) idiot. Yeah Peter Lynch was clueless, Warren Buffett was lucky, Jim Cramer adds nothing more than random chance. All share prices are "correct" at all times. I'm not buying it. I'll stick with Lynch, Buffett, Cramer and forget random-walk indexer Hebner. Heebner (Ken) yes, Hebner no.

This guy is the biggest idiot yet. There are a thousand reasons to sell a stock, including you need money to buy something else, or need money for everyday life. Reason 2 or 3 are the most boneheaded reasons I have ever seen. How can this guy get any facetime with any news outlet? I am dumber for having read this nonsense. What a tool.

He should beat Peter Lynch's record first before he mentions his name

If my only choice of investment managers were Mark Hebner or Peter Lynch, I would pick Peter Lynch in an instant.

Yes, Peter Lynch was an idiot and only beat the indexes on a consistent basis...

Probably the worst reasoning ever -
Argument against Reason 1) People sell for a million reasons - need cash, think they've found a better stock, stock has already met their expectations. You can't use personal reasoning and thinking (whether rational or irrational) to argue something like this. Under the same point, if investing in the indices is so great, how could I possibly invest in them? Wouldn't everyone be holding on to their shares in the indices and not sell and prices skyrocket?
Argument against Reason 3) What makes people think they are smarter than the millions of people whose opinions are already factored into the price? You would have to argue that the markets are ALWAYS rational, hence no bubbles. Millions of people thought that investing in the tech bubble with zero earning was a great idea. Does that mean there weren't people smart enough to see such things is unfeasible. This article is extremely poor - I can't believe it was even posted on yahoo.

I bought AAPL stock when I bought my first iPhone - that was when it was $194. Worked fine for me

Unfortunately, the reasoning given by Mark Hebner is faulty. Selecting individual stocks with a wide distribution of returns does not typically yield the same returns with higher risk than an index, even if the expected return rates are identical. To see this, all one has to do is consider the following simple thought experiment: Compare two portfolios, Portfolio A and Portfolio B. Portfolio A consists of a $1,000 initial investment numerous index funds producing a constant annual increase of 10%. Portfolio B consists of a $1,000 initial investment, equally partitioned among two stocks. $500 is initially invested in the first stock with no increase/decrease in value ever. The remaining $500 is initially invested in a second stock with an annual increase of 20%. Note that the returns, averaged over the investments, are identical for both portfolios: 10%. Let's assume all investments compound discretely.

After the first year, Portfolio A is worth $1,100 and Portfolio B is worth $600+$500=$1,100

So far, they have identical returns, but here on out you're compounding to a greater extent on the 20% stock investment.

After the second year, Portfolio A is worth $1,210, whereas Portfolio B is worth $1,220

After the 10th year, Portfolio A is worth $2,593.74, and Portfolio B is worth $3,595.87

After the 30th year, Portfolio A is worth $17,449.40 and Portfolio B is worth $119,188.20! (6.8x the amount in Portfolio A)!

In reality, you're subjecting yourself to more risk with a Portfolio B approach. I'm not advocating one investment model over another.

So....., this enlightening works kinda like this: Don't pay slots/craps/roulette and risk a big win/loss (INDIVIDUAL STOCKS), just buy stock in the owner of the casino and ride his coatails( INDEX FUND)? Might work...sounds rather boring for thrill seekers.

I have used Peter Lynch's principles for years and I have beaten the market every year. Information is not equal for investors because there are a lot of investors who have no idea how to value companies. They just use momentum or they hear analysts talk about a company on tv.

He is still a fund advisor and he makes money on your money. When you buy stocks, you don't pay an "advisor". You may pay a small transaction fee, but an "advisor" is not constantly skimming - for what? They usually don't advise you at all, and when the market is tanking, they are still getting paid. Diversify your stock picks and that will help to smooth out the gains and losses. Another option is OPTIONS which also help smooth out losses ( and gains to be honest) but decrease risk.

Wow, this Hebner guy is ridicolous as Peter Lynch has the track record to prove it. How does Hebner make money? He probably charges a WRAP fee and puts money in index funds. So if he charges 1% a year his clients all get one percent less then the index year after year.

Summarization of above:

1) don't buy individual stocks, you're not as smart as everybody else
2) don't buy stocks or mutual funds, you should only invest in a diversified portfolio of index funds
3) btw, I run an index fund

Conclusion: Hmmmm....

I always love when somebody justifies their claims with claims of logic such as "I don't believe that ayone can..." as Mr. Hebner does. His belief is not the issue. This has been studied to death, and the issue has been decided. Institutional investors as a group do outperform the markets and exhibit skill. While it is true that mutual funds and other institutional investment vehicles on average do not, it is not because professional investors do not demonstrate verifiable skill. They do. The institutional and commercial reasons that skill does not show up in returns of their clients on average (though many have done much better over very long stretches of time) are beyond the scope of a comment.

Since we know that professional investors as a group demonstrate skill, we can assume that some individual investors can as well. Whether any particular individual investors will be able to do so is another question entirely, and a much better argument for Mr. Hebner to make, but it is not because his "belief" is correct. It is not.

This is the same theory as that described in "A Random Walk Down Wall Street" - that nobody can consistently beat the market, and that when you factor in the trading costs of equity mutual funds, nobody in the long run can beat an index fund.

1) People sell because they've made their 2% on a swing trade, or they are cutting their losses - and often has nothing to do with the fundamentals of the company. As a longer term investor, I buy because I'm willing to hold the stock through all of this noise and am looking for the longer term gain.

2) to say that the expected return of an individual stock is the same as the expected return of the market is just plain wrong. Where did this guy go to school?

3) It's all baked in? If you believe that the market is that efficient in the short term, then you need to give this guy your money, because, well , your not too smart.

4) I agree this article is all about publicity and getting his name plastered all over Yahoo. The sad fact is many gullible, less knowlegable investors will take the bait and believe the @#$%. And this guy will just get richer. So, he's a smart marketer and will take your money, but he knows nothing about investing.