I was at a talk several years ago given by Peter Drucker (he passed away last year). One of the things he spoke about was the difference between data and information. He explained the difference with the example of a phone book. A phone book contains data. The number you need out of it is information. He said that though we have more and more data, that there may be less actual information.
I definitely agree that we have too much data. The internet is an amazing tool. But it can make getting actual information more difficult. In Peter’s example, imagine having a phone book with the phone number for everyone in the world in it. But you still just need the one phone number you’re looking for. That’s a lot of pages to flip through. The internet is just like that.
So I recommend doing two things with your investment research. First, focus on what’s important. Yes, it’s all fine and good to have 15 years of historical return on equity figures for a company. But does that really help you decide if it’s a good stock? Or is it just a lot of extraneous data? Second, find tools that let you search through that information more quickly. Going to Yahoo and typing “Oil stocks” yields about 1 million responses. Not very helpful. Instead focus on a few useful websites and search techniques to filter through the data quickly.
Keep that difference between data and information in your mind and you’ll have a lot easier time researching your investments.