The Future is in front of our eyes
How much would you pay for that next month's Wall Street Investment Journal ?, Dalal Street Investment Journal ?, Money Today?, Outlook Money? and many more, A bundle!
Information, like Money, has a present value. The longer you take to recognize it, the less value there is in it.
And, to your surprise the future is taking place now and is being reported to you all the time by your own idiot box only.
Exactly, do not panic, failure to spot change and respond to it can be hazardous to your economic health but it can be done with reasonably accuracy.
My father, now a retired Government Officer, watches relevant channels related to Stock Market and analysis upon the advice given by various Stock Market Masters. He gains a bit but yes he losses also. Over time he has developed a system for investments which he abides by.
In the field of statistics there is a concept called a "Naive Model" which simply means that what has happened will happen again.
Again, the "Elliott Wave Theory" assumes that economic cycles repeat themselves. Do people collectively react the same way ? Every time ? Are we that robotic ?
If that is true why didn't the so called Stock Market Masters predict the market crash of 1865 (pre BSE era),1992 and 2007 to name a few.
And, why were they not able to predict the crash of 2008 due to Bankruptcy of Lehman Brothers which resulted in an anchor drop crash.
You just have to take to news from different perspective, by connecting the dots forward not backward. What is the general tone of the news ? How people will react to it ? What additional information can be gathered ?
If you could read or listen every news article in every news channel , magazine, newspaper etc ,encode them into categories, and count the volume of news on every subject. You would conclude that those news receiving higher volume are the major issues of the day.
Not a startling conclusion, right ?
But these major issues represents pressure points for potential change, trends and opportunities. You have to be a news scanner not consumer. You should be able to understand what's not written.
This takes me to " John Naisbitt's Methodology". He monitored 6,000+ newspaper monthly to discover what was being written about. If some news is being repeated, it means the news is important for that time hours and what if a new news is being reported, you guessed it right, the previous news is not relevant for that time hours.
This is an important point because if something forces its way into the news, something is forced out of it. This means the news has outcompeted all other issues that could have been reported, which in turn means the issue is important for the consumers for that time hours.
Now, I can't track news by this method of Mr.John Naisbitt, nor can you. But i can give you some ideas that will make you a better news monitor.
Hence, the title of this story: How to Make Money in Stock Market by Analyzing the News, part 1.
Do join me next time for other parts.
Thank You,
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