Recently, the media is flushed with bad news, existing housing market dropped, new home sale drops, blabla, a very clear signal that the buffet's buying of USG has been forgot. A bad sign? Actually, it is not. As small investors, we should have a "dirty" mind and a "clear" heart. A dirty mind tells us that there must be something wrong behind the dramatically consecutive drop of stock price. A clear heart tells us that even sometime it looks "bad" superficially , indeed maybe an opportunity lying there waiting for us to pick it up.
An example of dirty mind here recalls the story of buffet's buying of USG, citing that house market is bottom. This news was broadcasted over the world by media, being afraid of that investors may miss such a big opportunity. Always remember, dirty mind set told us that it was a manipulation at that moment. Why? remember, institutions and hedge funds make money from small investors, if there is a chance, we will be the last to know. The trading volume efficiency told us that once the price soars, there were huge selling there. Hmm, if it was a good news, why should they sell?
Clear mind warns us the value of a company. AAPL, once it dropped to 90 for its news of delay in iphone, would be good chance to buy. Why? is it a good news or bad? will it affect the company in a long run? Whether the company explained any reason? Do the adjust their guidance?
If you figured out this, play with your sharp money and got reward.
Now the housing market has been doomed, comparing to the price change in USG? Cooperating with those latest news? No. Clear mindset brings it into our monitor radar again for several reasons. The market have been filled with bad news. Investors have been reduced their speculation into this area. People are holding their money into new house. Hey come over here,don't you see the new boom tech area? New H1b Booming? Houses are always needed unless you wanna sleep on the street. Copper price has been raised a lot which in another way informing that house market will be bottom soon. What shall we focus? yeah, materials used to build house, wood, steel, copper and alumnia. all are turning if you focus enough into those area. It is almost the time to buy into this area.
Be "dirty" while be "clear"!
11 comments:
赞千户，总能比一般人多想好几步:-)
都放watchlist上了:-)
As it is, AAPL beat the Earning, Stock soar!
恩，是啊，没搞奥普神太亏了:( 看书看书！
Hmm. This is a good post.
As a beginning investor, I particularly feel my mood swings a lot with the news without thinking hard and independently of the real implications on the foundamental thing: earnings. It is so very easy to get panic over the bad news.
Independent thinking is really key, not just for the stock market.
em,Carol,
you will learn it hehe.
Hi Bobby,
I think you have got the right point, Earning is the most important thing to drive the stock price in a long run. :)
Metronic, I am still interested in the financial sector, in such a prosperous market, the CME, NMX, NYX, ICE, BOT should get more profit since the trading is more active. I loaded some NMX 130 call today, hope it will rocket tomorrow :)
hehe, call is always nice in bull market.
I need to use that too later on.
我的NMX，你上了么，哈哈。
呵呵，要我会用option,我也不上nmx,
能上的太多了。
today I purchased 2 CME may 560 call@2.3
Local bottom around 510, hoho
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