The news! How much should it affect you?
We've all heard things like "buy the rumour, sell the news" and other related things. The news has become an integral part of investing today - good or bad news can dramatically influence the market.
Take for example: Chinese regulatory news - look at how this has impacted $Futu Holdings Ltd(FUTU.US$ , $UP Fintech(TIGR.US$ , $Alibaba(BABA.US$ , $Bilibili(BILI.US$ and many more promising Chinese companies.
So the question is: do you trade the news?
Personally, while being up to date with news is important - especially for investing, we need to be discerning. Why?
Firstly, some articles you may find online are written with hidden intent and may not be representative of the actual situation. For example, articles have the intention to bash certain companies and hence overstate their shortcomings. If we take this information as face value, we may end up losing out on a potentially profitable trade.
Secondly, the news often fails to reflect the whole picture. For example, news that a company has dipped significantly in revenue may not necessarily be as bad as it sounds. One needs to do further research to make judgment - perhaps the company has embarked on another costly project, perhaps there are good reasons why the revenue has dipped as the money is being allocated in other ways, perhaps there were external factors causing it which may not necessarily reflect on the company's decrease in efficiency. Who knows? A news article serves to update you on recent developments of a company, but it doesn't give you the entire picture.
My verdict? Knowledge is your friend. Use the news to further deepen your analysis. Do not make your trading activity entirely based on news, but at the same time, keep up to date with the news and do more research to make a balanced judgment.
Take for example: Chinese regulatory news - look at how this has impacted $Futu Holdings Ltd(FUTU.US$ , $UP Fintech(TIGR.US$ , $Alibaba(BABA.US$ , $Bilibili(BILI.US$ and many more promising Chinese companies.
So the question is: do you trade the news?
Personally, while being up to date with news is important - especially for investing, we need to be discerning. Why?
Firstly, some articles you may find online are written with hidden intent and may not be representative of the actual situation. For example, articles have the intention to bash certain companies and hence overstate their shortcomings. If we take this information as face value, we may end up losing out on a potentially profitable trade.
Secondly, the news often fails to reflect the whole picture. For example, news that a company has dipped significantly in revenue may not necessarily be as bad as it sounds. One needs to do further research to make judgment - perhaps the company has embarked on another costly project, perhaps there are good reasons why the revenue has dipped as the money is being allocated in other ways, perhaps there were external factors causing it which may not necessarily reflect on the company's decrease in efficiency. Who knows? A news article serves to update you on recent developments of a company, but it doesn't give you the entire picture.
My verdict? Knowledge is your friend. Use the news to further deepen your analysis. Do not make your trading activity entirely based on news, but at the same time, keep up to date with the news and do more research to make a balanced judgment.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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GolikovViktor : everything is just like that
YC Xiao : Take advantage to buy on bad news and rumors after analysis and due diligence that the stock fundamentals are there.