Buy the Rumour and Sell the News

Have you ever heard that saying before? I hope so because it is relevant more often than you think.

A Beaten Stock

Today Great Southern Plantations reported that their sales were up by 50% to post a record profit. Well how do you think the market responded? Yep you guessed it, dumped the stock by up to 30% at one stage.

Trading Announcements

To trade a stock like this long term you may not be to worried by this sell off as fundamentally you may think it is still sound. What this does highlight though is the difficulty trading short term around company announcements.

If you do get it right the results can be amazing, but if you had been long (purchased) the stock yesterday your result would currently be disastrous. Trading longer term this may not be as detrimental to your overall result but is one that you must consider at all times.

Have a great weekend.