SMT TV Ep. 15 – DO NOT Follow The News

SMT TV Ep. 15 – DO NOT Follow The News


Hi everyone! Welcome to the SMT TV Channel,
please like and subscribe to my channel and click the bell on the right side to get the
notification as and when we have the latest video. Show me some love, please like, subscribe
and click the bell. See you inside the channel! Okay hi everyone, this is Collin here. Today
I want to share with you some insights about reading news. Does news help you in your trading?
Okay so we have this article over here, dated 1st October 2007 Monday okay? So if you read
this headline right? ST Index expected to keep up strong run okay? It may surge past
4,000 points by year-end, say upbeat analysts. Okay, Credit Suisse maintains the STI will
hit 4,200 in the next 12 months. CIMB says it’ll hit 3,780 in the next, by year-end.
Phillip Securities say it’ll hit 4,400 to 4,500 by year-end. If you read such news,
do you think you will invest in the market? What do you think? And then on top of that,
let’s see some other news on that day, third quarter, this is from the Ministry of Trade
and Industry. Wow, very official. Okay the Singapore economy continued to register strong
growth in the third quarter of 2007. And it’s expected to grow even more you see, up from
8% previous year, this GDP actually grown okay? If you see news like that, Do you think
you will invest in the stock market? Let me see, let me show you what happened, if you
invest in the stock market. Okay if you were to -The news right that actually happened
right that I showed you just now, is actually on this date okay? This is the date that the
news came out, both the Straits Times news and also the MTI report came out on this date.
From that week onwards, this is a weekly chart right? From that week onwards, STI did not
hit 4,000 okay? On top of that, after about how long? About maybe a year okay, STI dropped
63%, STI dropped 63% after you read that news. So for people who bought anything or the Index
at that point of time, would have lost money. Even till today, STI has not captured back
this high yet. So if you have bought something, you’d still be losing money. Okay let’s talk
about buying. Let’s look at the next news, let’s talk about buying. This is on 29 October
2008 okay? This news came out – economy continues to stay weak for the next year – okay? Economies
predict almost no growth for the next half of the year. Economies that The Straits Times
talked to predict no growth next year. And some of them even predict negative growth,
there’ll be a negative 1.2% next year. So the recovery in the second half should not
be taken for granted. Any recovery will be gradual and do not take it as a V-shaped
economy like the past recession. So you see news like that, do you think you will invest
in the stock market? Okay, so let’s see what happened after this date 29 October. Okay
in reality, this is the week that the news came out, okay? And after that week okay?
The stock market, within a period of about 1 year, close to 2 years, okay? The stock
market has rallied 115% okay? If you were to sell anything here, you will lose money
also because you will not be able to capture the high again. Okay so this is the challenge
of reading news okay? Most of the time you get it on the wrong side of the news. So you
may be asking, Collin so what should I do? Okay so there are different tools that you
can use to help you in looking at the market. For myself, I use a tool called TradersGPS.
This tool, this is the example of TradersGPS, this is in 2008 okay? When the market came down,
there was a signal for me to short, so you actually can make money by selling down the
market, and then after that in 2009, there was also buying signals, along this way up.
So there was an opportunity for me to buy. For me, I use a system, it’s much more reliable,
it’s much more objective when you use a system to trade the market. Again, I say it’s not
100% but you’re better off than just reading news okay? So if you want to find out more
about our previous videos, what have I done previously, can click the link on top and
below here and see you at the next video, bye!

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