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The following article is part of an ongoing educational series. The previous article can be found here.

Gaining access to the latest news is the least of the problems facing the private investor in the information age. In fact, it's impossible to escape the barrage.

Listen to or watch any news broadcast and you'll hear references to moves in the US Federal Reserve's interest rate, the sharemarket, commodity prices or exchange rates.

Even while we sleep, global investors and speculators are moving money and markets in ways that affect our investments. Investors who used to rely heavily on their stockbrokers for information can now get instant access to real-time stock prices and market updates over the internet or their smartphone.

Failing that, there's the evening news (a bit slower), the trusty newspaper (positively snail-like), or any of the numerous other sources of stock information that have emerged.

News that used to take days, then hours, and then minutes to circle the globe now takes seconds. And perhaps the real revolution lies in the fact that individuals can get their hands on much of it as quickly as the professionals.

Yet, while the information boom is clearly a powerful tool for the average investor, it doesn't always make it easier to arrive at smart decisions.

It's easier than ever to suffer from "paralysis by analysis" or even to read the wrong things into the right information. And this is compounded by the rapid changes occurring, particularly in the fields of technology and communications.

Teams of analysts at institutional investment houses agonise daily over the direction of interest rates, economic growth, fluctuations in global markets and any other indicators that may affect their portfolios.

However, others march to the beat of a different drum.

Warren Buffett, the legendary US investor, has scant regard for short-term forecasts of interest rates, market trends and so on. In fact, he believes Wall Street's obsession with picking short-term trends actually works to the advantage of people like himself - those patient souls who focus on companies as businesses rather than stocks.

"We've often felt that the only value of stock forecasters is to make fortune tellers look good," Buffett says.

Buffett's approach is to concentrate on individual companies so intimately that he gets to know them better than anyone else: the factors that drive them, how effectively they use investors' funds, and any clouds on the horizon.

In this way, he says, you reduce the risk of holding a stock, not merely by diversification, but simply by increasing your knowledge of it.