How to analyze fundamental stock market news and profit from it?

[kelvesy]

Does that equate you to a short-term investor or day-trader hoping to profit from company announcements? I think that is incredibly time-consuming! You'll have to wait at your desk, and be quick in their decisions. Furthermore, your brokerage fees would add up quite substantial considering the amount of trades you might have made. Respectfully, I don't think this method can bring you above-average gains. Can you cite examples of your own trade whereby you made money?

Why not, settle yourself as a value investor? Choose companies that are for sale in terms of their intrinsic value VS the market price, and companies that are properly managed? You can pick up some really useful books found in 'Interesting Books' section of this forum.

[yeokiwi]

What is the most interesting part of the investment book "The Intelligent Investor" as compared with many other investment books?
If you have the book, you can do a quick flipping through of all the pages.

But.. nowadays, people do not read books anymore.

[gautam]

Let me relate my true life experience before I became a pure long term investor.

Nearly a decade ago, I was new to the world of investing or trading, whatever you call it. My business was flourishing and I have 2 properties at that time. I decided that I cannot be working like no tomorrow. I was working 10-12 hour days and returing home after midnight at least 3 days a week.

Forex was out for me, as I have this thinking that it was too volatile and except for soros, I haven't heard anyone in s'pore who truly became rich doing forex.

Then came stocks. So I opened a trading account with Kay Hian. I asked my broker for tips and started trading with real money. I bought based on recommendations or info or feel and sold based totally on the same. Sometimes I made a few hundreds within a day, sometimes, when lucky, a few thousands. Totally without any fundamentals in my buying and selling. Can make money is good a,lready. No need to consider other things.

Overall then, I made some and I lost some. If I didn't recall wrongly, I made a bit more than I lost. But I LOST MY PREVIOUS TIME, which cannot be measured by money. That's on top of managing my business and family matters. Really, 48hours a day also not enough. I spent lots of time taking to my broker and trading! I was kept awake many a night, thinking of what strategy I should use the next day. And what to do with the stocks I have bought the previous day and not sold them yet. What if the market goes down? Life was not good.

Then I thought to myself, I am well educated and I got a proper business, how come I ended up this way?

I did not bother to read up any investment books at that time. Surely there must be a way to invest properly and safely. I gave myself a a little time or I will simply just go for bricks and mortar.

I spoke to my broker about what he thought was cheap. Then came certain names like hong fok, bonvests, allgreen, auric etc. To him, anything which would promote trading to his clients is good for him.

I began to buy a few of the above counters and waited. Again, some made money and some did not. But now, I began come to this awakening that those counters were deep value, and for them to vanish in value was not possible as the assets they owned were real. But those counters paid miserable dividends, some did not pay at all.
I did not have the patience to buy and hold something which gave me little income, and ended up a lot of funds stuck. But the difference now is that I COULD SLEEP soundly. I know that I can wake up the next morning unlikely to find any of those counters halved their value.

Now true, that I do not need to watch them much as I called myself a "deep investor" (a bit thick skin, pardon me)
I had more time. Investment volatility was reduced now..much. My business was not affected. My sleep was intact.

I thought to myself, something was still lacking. Surely, I should hope for or get something for waiting. Dividends...or regular payouts for the risk of staying vested in those counters! Then I did some research in the nlb about dividends. I found a few book written all about dividends. I wrote about dividends in a few previous threads and I shan't reiterate them here.

So I became a long term investor with a special interest for dividends, growing dividends. I have never look back since. My wealth have grown and I can choose to work or choose not to; and the only thing now is that I am trying to buy back my lost time, time lost when I was so busy working and chasing wealth.

That's my story. Thanks for reading.

[smallcaps]

How to analyze fundamental stock market news and profit from it?

Everyday got so many news come out from bloomberg or Reuters. Some are positive, some are negative.

How do we analyze the news to decide which are positive for the company and which are negative? And the degree of positivity and negativity.


On the practical side, my idea is to camp at my computer, wait for the news to come out.
If the news is good news, and prices have not moved, I immediately buy
If the news is bad news, and prices have not moved, I immediately sell

But I guess its not as simple as that because prices will change very fast.
So the question is how do we analyze fundamental stock market news and profit from it?

Maybe those news that are negative but are temporary in nature, if the market over reacts, then got chance to buy based on a higher MOS.

[smallcaps]

Or maybe buy in anticipation of certain news (that may never come), like writeoff of loss making assets/businesses that will boost earnings...

[kelvesy]

What is the most interesting part of the investment book "The Intelligent Investor" as compared with many other investment books?
If you have the book, you can do a quick flipping through of all the pages.

But.. nowadays, people do not read books anymore.

The trend now for my generation (early 20s) is we're consumers of digital media - proliferation of YouTube, streaming sites, Instagram, Twitter, Facebook and etc. There are so many social media applications that are vying for our time. But time is ours to control. For me, each day, we only have 24 hours, so we have to spend it wisely. I've realised I've learnt nothing from using too much social media, ironically, it tends to hampers real socialising skills (in my opinion). Books tend to be a better choice to 'invest' my time in. Those that are insatiably curious will be rewarded in folds when they read good books.

My fav investment books are 'The Five Rules of Successful Stock Investing', 'One Up on Wall Street', and 'The Winning Investment Habits of Warren Buffett & George Soros'. Fisher's Common Stocks and Uncommon Profits is quite dry for my personal liking.

[chialc88]

minor correction, K

Not just for your 20+ generation...ok?

My father asked me a simple questions.
What is inside these small little handphone?

Why people like 50+ years keep watching them ... while waiting for bus, inside bus and some even watch when walking around shopping center.

So, social media aka Web 2.0 impact a lot of people life, hur... definitely beyond what we see/know.

Don't believe me? wait until your long lost aunty call you up and ask you to help her in candy cluster one fine day....

Happy New Year... definitely a better year ahead


A Life not Reflected is a Life not Worth Living.

[Aldar]

News = noise.

Keep abreast of news but never trade/invest based on news (exception: Smallcaps is right - if market overreacted and you felt that the company with bad/good business moats is overvalued/undervalued, perhaps you can short/long it)

Read more:
- value-investing books (The Manual of Ideas is interesting)
- ideas-generating websites such as http://www.beyondproxy.com/ and seeking alpha

Understand what's:
- Investment moats/ sustainable competitive advantages + barriers to entry
- Margin of safety (existence of a gap between current market valuation and intrinsic valuation)

Learn how to control your emotions - fear and greed.

[CityFarmer]

News reports should be read as analyst reports. Focus more on facts, and less on opinions/conclusions, IMO.

I used to read only first few paragraphs of news report, which usually state the facts.

[wahkao]

anyone here digs out the financial statements every quarter, lay them out on a chart to project into the future?

I was thinking financial statements research should be pretty insightful to answer many questions. Let the numbers speak for themselves.

I managed to find a lot of dirt within 5 seconds of looking at the time series chart. Example, Quarter on Quarter net income for losses. The hardest part is digging out the data.

what do u all think?