Market News and Your Reactions....Impact or No?
I was wondering how much does market news impact your decissions. For example a short while ago
this came out saying Sarah Lee was short on profit predictions for Q4. This would tell me, it's a good idea to short the stock. I'm not saying go balls to the walls, but I'd spend a few hundred.
So, would you do that? Only if you were sitting in front of the computer (like I am) and happen to see that?
I ignore it all. I'm not a day trader, or a short term trader. By the time that information goes public, everyone has seen it and the market has adjusted for it, especially the guys who trade for a living.
I am an investor, and I invest for the medium and long-term. Unless something fundamentally changes within the company, headlines like that are just a blip in the radar in the grand scheme of my investment. They are still the same company as before that report was published. The only time I would make any kind of short-term bet would be if I have a hunch about something that hasn't been published nationally.
That being said, sometimes you can profit from short-term corrections when earnings information is released. I don't know that you can do it consistently and if it's worth the effort, unless you can get the information before every financial paper and website posts it for the world to see.
Originally Posted By graysonp:
I ignore it all. I'm not a day trader, or a short term trader. By the time that information goes public, everyone has seen it and the market has adjusted for it, especially the guys who trade for a living.
I am an investor, and I invest for the medium and long-term. Unless something fundamentally changes within the company, headlines like that are just a blip in the radar in the grand scheme of my investment. They are still the same company as before that report was published. The only time I would make any kind of short-term bet would be if I have a hunch about something that hasn't been published nationally.
That being said, sometimes you can profit from short-term corrections when earnings information is released. I don't know that you can do it consistently and if it's worth the effort, unless you can get the information before every financial paper and website posts it for the world to see.
Like right now....I bought into DSCO....after years of waiting approval from the FDA they got the green light to sell their drug in the US market. It's up 18%....Of course I bought some a long time ago when it was much higher so I'm still recovering from a loss.
Earlier this year, Wal-Mart posted 3 or 4 consecutive quarters of earnings that were below expectations. I bought at a low of 49. The very next day, quarterly earnings were released that exceeded all anyalysts' estimates. Last time I looked a few days ago, WMT was at 61. Sometimes you can make money by buying companies that have been beat up because they have not met investors' expectations in the short-term. As Ben Graham would say, if you hold a stock and that stock has a market devaluation, yet the fundamentals of the company remain unchanged, buy more.
Originally Posted By molar:
Earlier this year, Wal-Mart posted 3 or 4 consecutive quarters of earnings that were below expectations. I bought at a low of 49. The very next day, quarterly earnings were released that exceeded all anyalysts' estimates. Last time I looked a few days ago, WMT was at 61. Sometimes you can make money by buying companies that have been beat up because they have not met investors' expectations in the short-term. As Ben Graham would say, if you hold a stock and that stock has a market devaluation, yet the fundamentals of the company remain unchanged, buy more.
That's what I did. I bought before it went down...then at one of it's lowest points (today) I bought 15x the shares I already had. Reducing my price per share by 60%.
