News – ‘Buy on speculation, sell on news’ the way to go for now?

Anyone who is currently speculation/investing in stocks, thought wrong that current stock market is a free market. The market is setup mainly for the big boys and not ants (the rest of us). Sometimes some ants wins but they (the big boys) will make sure that the winning ants is small just to paint a picture into the other unsuspecting ants that the market is still a free market that anyone can win. It is a confidence game. When confidence  in a financial system fails, the whole system collapse. The big boys would not allow that to happen. They need the masses/ants to continue to use the system so that their own wealth in the system is maintain. Once in a while, the big boys will pull out some of their wealth and convert it into hard asset like gold, property, painting, antics cars, etc but they will not pull out all of their wealth all at once since they still the system up and running and they need ants to run it.

 

The smart money, which often is also the big money, always invests in advance and, hence, the age-old saying of “buy on speculation and sell on news”.

Local investors, however, cannot rely only on good economic numbers to help push the stock market higher as the global financial system is now integrated, meaning that whatever happens in New York, London or Moscow can easily affect the market here.

Thus, it should come as no surprise that foreigners have been net buyers of Malaysian equities over the past six months.

One shivers to think what will happen if they were to suddenly turn into net sellers.

Will the market be able to absorb such a selling pressure?

 

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