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Buy the rumor and sell the news.



This only works if you know the future. After you've heard the rumors, and the news have been reported, you're already too late. Buy solid companies over time and keep them, that's what works.


You don't need to know the future. You just need to hear the rumor before everyone else does.

Why do you think Apple had a big run up before they announced earnings and then dropped the past two days? Just a coincidence? Maybe, but more likely Wall Street knew the news before it was news and the folksy wisdom of "buy the rumor - sell the news" seems pretty spot on.

I do agree with your sage advice that for the individual investor, buying and holding good companies is a sound strategy (Peter Lynch and Warren Buffet would agree too). But no matter what your investing strategy, the individual investor is typically at an information disadvantage vs. investment professionals. They spend all day doing it. How can you possibly be more in "the know" than they are?

Over the long term, perhaps it evens out as you suggest, but the comment above me was wondering what explains why Apple stock would lose value on the day they posted their largest quarterly results ever. Wall Street buying the rumor and selling the news makes some sense to me. I've seen this happen over and over again (not just with Apple yesterday).


"You don't need to know the future. You just need to hear the rumor before everyone else does."

Good luck with that.

"How can you possibly be more in "the know" than they are?"

That's exactly my point. Also, if you do have privileged information, that's illegal.




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