You’d think the news that rising corn prices would provide a great opportunity to make money in that commodity. But the move in corn was…not last week…or even last month…but last year!
In many instances, by the time a “news story” is reported in your daily newspaper, on the evening news or in a magazine, the “opportunity” may actually be over.
Hard to believe? Ever notice a story about a stock, then bought that stock…and watched it drop right away…even though the company was rolling out a successful new product…had great quarterly earnings, or had some otherwise significant news?
For decades, people have wanted to know…”how did everyone else jump on this story so quickly? It’s almost as if they had inside information! I can’t win!”
If you’ve seen the charts I use to manage your money…you’ll notice they simply measure the changes in supply and demand. The charts never “know” the reason why the price of something is moving…all the charts report is a stock with more demand, and so prices must rise. Or a stock with a lot of selling…too much supply in the market…and so, prices must fall.
Again, we never know the reason WHY. We’ll often find out the actual reason weeks and sometimes months later…when the story about the impending collapse of a stock appears on the front page. It doesn’t matter what “the reason is” that makes a stock price jump. It could be inside information. It could be money flowing in or out of a sector.
Big money — like institutions and mutual funds — leave tracks. All we want to do is follow the footprints.
The charts give us the tracks.