Beware the Classic Trading Mistake of Hubris

NEW YORK (TheStreet) -- Journalism that serves traders best is either actionable -- "Buy this! Sell that!" -- or preventative. In the case of journalistic prevention, the media tries to steer you away from prevailing assumptions or perceived wisdoms that are faulty and will do you harm.

But in writing about American International Group(AIG) , Motley Fool chucked the concepts of action and prevention out the window.

Instead, they claimed perfection.

Look at this headline, but pretend that you are staring into the sun and don't do it long, OK? It can only hurt. Here it is:

"Has AIG Become the Perfect Stock?"

Trafficking in the concept of perfection in the imperfect world of the stock market often proves famous last words. It encourages the classic trading mistake of hubris. Any trader worth his salt has to assume at least a degree of trouble. Once you veer into "you can't lose" territory, traders get overconfident and soft in the critical thinker. Andrew Grove, who built Intel(INTC) , wrote a great book. The title alone -- "Only the Paranoid Survive" -- suggests constant vigilance. Easily granted confidence speaks against such functional paranoia.

By the end, of course, Motley Fool is backing off of claims of absolute perfection. They know better. You have to know better. But every time an article has to touch its toe on the opposite argument for the sole purpose of not being dismissed as drivel, you know something is intellectually dishonest about the original thread of thought.

The journalistic mission on behalf of traders should be to give actionable advice to help you avoid preventable mistakes. On AIG, The Motley Fool trafficked in famous last words for effect, encouraging the classic trading mistake of hubris.