Investing based on upcoming events or trends, eg. Xmas, population growth

[wahkao]

Investing based on upcoming events or trends, eg. Xmas, population growth

Hi Everyone. The future of stock prices will follow future earnings. So if we know events/trends that will definitely improve future earnings, isnt it a good method?

Example1:
Singapore is facing an aging population, so medical treatment will surely be hot in demand in the next 10 years. So it is a good idea to buy medical stocks

Example2:
Chinese new year is coming. As such, garment makers will have good profits in Q1. So its a good idea to buy garment companies in 2013 Q4. Especially those China ones.

Example3:
Shipping is going down. As such shipping related companies will not do well. As such, we should stay off shipping related counters.

Example4:
Q4 Nov-Dec is where holiday makers go on holiday. As such airlines and hotels will surely have good revenue in Nov-Dec. We should buy these stocks in Oct.

Example5:
BeiJing Olympics is coming in 6 months. Businesses related to Beijing and the Olympics will surely benefit. Buy these stocks.

Example6:
SMRT has no competitors. It will be able to maintain its earnings. This is further backed reinforced by Singapore's 6.9Million future population. Buy SMRT sure wont go wrong.

Example7:
Singapore is highly competitive and focuses a lot of education. As such private schools in Singapore will surely make good profits. Buy Private school stocks in Singapore

What do you think of investing based on upcoming events or trends? I think it makes a lot of sense. A lot of my friends say they been using this strategy with huge success.

[CY09]

Hi Wahkao,

Example 1 is well known and we have seen our well-known medical listed coys trading at high valuations. this means many people have priced in earning growth which will bring their PE to reasonable levels in 5-10 yrs time.

Example 2
It is best to see EPS in a full year form than on quarterly. In addition, many people are aware of such seasonal factors hence I suspect it is very hard to profit from seasonal profits bumper

Example 3:
No comments for this

Example4:
Same as example 2

[chialc88]

Example 3:
May be exactly opposite scenario?
Shipping is up and we should all buy shipping stock?

Example 1,2&4: Same answer as our dear VB friend


A Life not Reflected is a Life not Worth Living.

[wahkao]

added more examples



Example5:
BeiJing Olympics is coming in 6 months. Businesses related to Beijing and the Olympics will surely benefit. Buy these stocks.

Example6:
SMRT has no competitors. It will be able to maintain its earnings. This is further backed reinforced by Singapore's 6.9Million future population. Buy SMRT sure wont go wrong.

Example7:
Singapore is highly competitive and focuses a lot of education. As such private schools in Singapore will surely make good profits. Buy Private school stocks in Singapore

[CityFarmer]

I recalled a well-known quote from Warren Buffett, "If past history was all there was to the game, the richest people would be librarians"

I rephase the quote within our context

"if economic events or trends were all there was to the game, the richest people would be economists"

[yeokiwi]

I recalled a well-known quote from Warren Buffett, "If past history was all there was to the game, the richest people would be librarians"

I rephase the quote within our context

"if economic events or trends were all there was to the game, the richest people would be economists"

A chart will only work if the data points have a good correlation with future events. Maybe, data points that are near to current date do show some correlation to future events but how about a data point that is one year, ten years or even twenty years away from current date? I doubt there is much correlation between the data points and future events.

Even for data points that are nearer to current date that have some correlations to future events, the correlation must be high enough so that by purely depending on the data points, there is an assured chance of that the trades are always in favor to the traders in the long run.