What does sell the news mean?
Have you ever actually taken the time to ponder that?
I know I have not as much as I should.
The issue is that some news gets bought….
…Really BOUGHT….
Some news does not.
What is the difference between the two?
I ask this question because as I write this AAPL is breaking 400 for the 1st time and announced a 4 for 1 stock split.
The last ‘trendy stock’ to do this was TSLA, which quickly got sold after a pop.
But then look at AMD, that stock reported news, and has kept going:
Why did AMD keep going, and TSLA get sold?
I think the answer is that the idea that you should ‘sell the news’ is a lie.
I do not think one should simply sell the news.
The answer is that in expectancy.
No one saw the news around AMD coming.
While some thought that its earnings would be good, I do not think a soul thought they would be as good as they were…
…Heck, Intel owners are scared right now…
Could AMD actually take down INTC?
Meanwhile in TSLA, the stock ran precisely because traders thought that TSLA might clean up on earnings this time around.
Thus, the real statement maybe should read:
“Buy the rumor….sell the outcome…if it is what the market was looking for.”
Not sell the news.
So the big question with AMZN, AAPL, and FB is this:
Was the outcome expected?
If the answer is yes…maybe the old adage is true: Sell the News.
If what we saw is a total surprise…
Maybe the phrase should be:
“But the rumor…and buy the news if it is WAY better than anyone could have thought!”
Your Only Option,
Mark
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