Trust News...Can you?

I was being forced out Friday. But that is not my concern. What concern me is on Wednesday the Fed announce a half percent rate cut. Then came Thursday, Dow plunged more than 360 points. That is what really scare me. I start to wonder what will happen to US market next. The magic pill is not working now and the Doctor (Bernake) can't do anything until one month later. And he did said that he is not likely to do anything.

Anyway I am not holding any position now. I will probably prepare myself for some shorting action this coming week. Will check T3B Forum for more shorting ideas.

Someone in CNA forum asked did T3B factor in the News into their software. In fact one of the reason why I sign up T3B is hearing Keane shared about how the big boys use News to play the market. I cannot agree with him more because I was once in such practice.

Some years back I was working in a listed company. Business was bad because they are in a very traditional business with little growth potential. The chairman is a uneducated but very shrewd and streetwise man. What happen is he actually got some technologies from oversea. But it is certain not those state of the art kind of technology. In fact it is something that is already in the the market.

He then got a few of us in to do business development. I was very puzzle that he actually employed us to market those kind of products. Right after that he engage a PR company and spended some 100k to blast it out. During my 3 month stay with that company I actually attended many of these press release and product launch. Although it did not make headline, but every newspaper have some coverage about this traditional company venturing into technologies.

There and then I did not understand why they spend so much on such ordinary technology. 3 month later I left the company. After less than a year, non of my colleage was there and without long that product died of it own.

But guess what. Their share price shot up. Looking at the chart now I realised that anyone who bought their shares based on News has actually got in at all time high price. And if I am a executive in that company, I would have buy in before the News at low price, sell off when price peaked right after the News.

My conclusion is very often than not, News is what the big boy wants you to listen. Basing on News to invest are basically falling into thier trap.