Looking for announcements

[deanoman]

Hey guys,
Im just starting out and am eager to learn as much as i can. This may be a stupid question, but yesterday i jumped on MIS and MMX because i was on the asx.com.au announcements section and saw the merger article. I was also on the same page today and while i didnt put money in, notice an article about DYE, and it made 7% today.

So my question is, and its going to be a stupid one, but is the key to good stock for the day, announcements!

 

[Trembling Hand]

Nope. A seemingly good announcement can strangely sink a stock. Best thing to do is to follow the announcements over a couple of months and find out for yourself whether it is a tradeable strategy. As with all things in this game the first time you stumble across something it looks good but with further investigation (which most don't do ) the opportunity isn't as great as it looks.

As always you may be able to find an edge there but you won't know until you paper trade it or do some sort of stats investigation.

 

[brty]

Hi,

but is the key to good stock for the day, announcements

TH, probably covered it in one word 'Nope', but I just had to add a little history/area of study for you.

Some people have the strategy of fading the announcements, and claim that is a good strategy. (buy the rumour sell the news).

If this is to be your strategy, then you need to study it first. By study means look up hundreds of examples, quantify it, see what happens 1day, week, month, year after the announcement price wise. Is the correlation of any pattern something to do with overall market direction or sector direction or interest rates etc.

Basically lots of work to prove up your theory, test it, then dip your toes in, don't dive in.

Probably the worse thing that can happen is you start making money by a method without the work, you will gain so much confidence in the fact that you have discovered the answer/secret.

The market is very good at dealing with overconfidence/arrogance.

brty

 

[white_goodman]

does it depend on the type and importance of announcements, for eg if at 9am BHP announced a record profit surely the price would go up and youd buy in at 10am....

i noticed the other day that westpac went down with the merger news, please explain (no pauline hanson)...

yes im young and learning

 

[Trembling Hand]

does it depend on the type and importance of announcements, for eg if at 9am BHP announced a record profit surely the price would go up and youd buy in at 10am....

i noticed the other day that westpac went down with the merger news, please explain (no pauline hanson)...

yes im young and learning

No most announcements are already priced in by the smart money( the ones that do research) before they are out. It is the lazy that are the only ones that don't know about what is being announced. That is why traders fade the news. Once every one knows, its useless. And once the lazy start to cotton on ya wanna get out fast.


Of course there is always the exceptions but it is not a bad rule to go by that by the time you know something everyone does and have priced that in.

 

[white_goodman]

No most announcements are already priced in by the smart money( the ones that do research) before they are out. It is the lazy that are the only ones that don't know about what is being announced. That is why traders fade the news. Once every one knows, its useless. And once the lazy start to cotton on ya wanna get out fast.


Of course there is always the exceptions but it is not a bad rule to go by that by the time you know something everyone does and have priced that in.

i get what your saying, how else are you meant to research some stuff tho unless your "in the know"

 

[Trembling Hand]

i get what your saying, how else are you meant to research some stuff tho unless your "in the know"

Don't fall for that rubbish that the game is rigged and all the players are sharing secrets. You have no hope with that mind set. And if you notice the punters that do sprout that BS happen to be crap traders. As an example have a look at Young Traders posts for someone that does his own work. Always extensive. Have a look at some of the good system traders post. Have a look at some of the Futures and Forex traders post. their "research" is years long and extensive.

Its only the lazy that look for the short cut and thats why they are always being dumped on by the smart money. Every good trader here has found something that tickles their fancy and worked on it until they are an expert (or work towards that goal) at it. Not one good trader here has the top end of the town whispering in their ear.

DYOR

 

[white_goodman]

Don't fall for that rubbish that the game is rigged and all the players are sharing secrets. You have no hope with that mind set. And if you notice the punters that do sprout that BS happen to be crap traders. As an example have a look at Young Traders posts for someone that does his own work. Always extensive. Have a look at some of the good system traders post. Have a look at some of the Futures and Forex traders post. their "research" is years long and extensive.

Its only the lazy that look for the short cut and thats why they are always being dumped on by the smart money. Every good trader here has found something that tickles their fancy and worked on it until they are an expert (or work towards that goal) at it. Not one good trader here has the top end of the town whispering in their ear.

DYOR

you missed what im saying....im jsut saying how do research something like a merger? like how do the experts predict or know these things before the general populous, is it all absed on tech analysis?

 

[Wysiwyg]

does it depend on the type and importance of announcements, for eg if at 9am BHP announced a record profit surely the price would go up and youd buy in at 10am....

i noticed the other day that westpac went down with the merger news, please explain (no pauline hanson)...

yes im young and learning

whitey mate, gday, if you look at SDL you will see the resource statement on the 19th/5 triggered an exit for many holders.The next day saw more releasing and then the buyers started coming back and today we see the breakout of share price.

So, dumping on the announcement would have missed out on the biggest jump this year.I can hear that little voice now ...

Decisions decisions decisions.

 

[Schmuckie]

Some announcements are predictable or you can make an educated guess, although you may not have the exact timing or the exact event. There may also be an announcement that come a complete surprise.

Let's use mining companies or advanced-stage exploration companies as an example.

If there's been an announcement about a drilling program expected to take an certain number of days, mark it in your calendar.

There's also some predictable development patterns. A lot of mining companies will announce that they're conducting pre-feasibility studies, and after that they will commission a feasibility study. At this point, they're getting serious.

Once a recommendation has been made for an environmental approval to a governing authority and an appeal period has passed, it's probably only a matter of time before environmental approval is given. The next major step after that would be a mining license.

There will also be lots of smaller steps along the way, maybe board appointments for people with a particular expertise. Usually, these appointments are a marker for the next development step. If it's an expert with finance experience, you might make an educated guess that within three to six months there will be an announcement about financing. If you've had financing announcements and anything that indicates getting close a mining license, keep a very close eye on the stock and watch for increasing trading volume. Although it may very well go bust (especially on financing these days), you can anticipate that eventually you will see announcements about either a buy-out or commissioning a mine.

Get to know the development stages of the industry you're researching. I'm using mining as an example because I know it best, but I'm sure there are others on ASF who can enlighten us about development stages in other industries.

 

[white_goodman]

Some announcements are predictable or you can make an educated guess, although you may not have the exact timing or the exact event. There may also be an announcement that come a complete surprise.

Let's use mining companies or advanced-stage exploration companies as an example.

If there's been an announcement about a drilling program expected to take an certain number of days, mark it in your calendar.

There's also some predictable development patterns. A lot of mining companies will announce that they're conducting pre-feasibility studies, and after that they will commission a feasibility study. At this point, they're getting serious.

Once a recommendation has been made for an environmental approval to a governing authority and an appeal period has passed, it's probably only a matter of time before environmental approval is given. The next major step after that would be a mining license.

There will also be lots of smaller steps along the way, maybe board appointments for people with a particular expertise. Usually, these appointments are a marker for the next development step. If it's an expert with finance experience, you might make an educated guess that within three to six months there will be an announcement about financing. If you've had financing announcements and anything that indicates getting close a mining license, keep a very close eye on the stock and watch for increasing trading volume. Although it may very well go bust (especially on financing these days), you can anticipate that eventually you will see announcements about either a buy-out or commissioning a mine.

Get to know the development stages of the industry you're researching. I'm using mining as an example because I know it best, but I'm sure there are others on ASF who can enlighten us about development stages in other industries.

so your sorta saying look at all announcements not jsut market sensitive ones, and you can read into or between the lines of there future plans...

 

[white_goodman]

whitey mate, gday, if you look at SDL you will see the resource statement on the 19th/5 triggered an exit for many holders.The next day saw more releasing and then the buyers started coming back and today we see the breakout of share price.

So, dumping on the announcement would have missed out on the biggest jump this year.I can hear that little voice now ...

Decisions decisions decisions.

ive been looking at SDL for a few months now, why would the rport on teh 19th trigger a dump, i only briefly skimmed over it but it looked positive and exceeded expectations, or did the market read into the report and see that SDL had put a spin on it?

 

[Schmuckie]

so your sorta saying look at all announcements not jsut market sensitive ones, and you can read into or between the lines of there future plans...

Trembling Hand, unless I misunderstood him, is saying pretty much the same thing that I did. Get to know an industry very well and become an expert on how it works. Some seemingly ordinary announcements will foreshadow market-sensitive ones, but it may be a while before the announcement comes. The timing will come with more experience, but it's pretty much common sense to keep a diary or put a reminder in Outlook for dates when an event timing estimate has already been given by the company. TH has years of experience and years of hard work under his belt. I'm going to throw out a guess that he's probably become an expert on several industries. Me? I just know one. If you want to start anticipating announcements, start with one industry you're comfortable with and then narrow it down to a handful of companies you're interested in.

Every good trader here has found something that tickles their fancy and worked on it until they are an expert (or work towards that goal) at it. Not one good trader here has the top end of the town whispering in their ear.

 

[white_goodman]

Trembling Hand, unless I misunderstood him, is saying pretty much the same thing that I did. Get to know an industry very well and become an expert on how it works. Some seemingly ordinary announcements will foreshadow market-sensitive ones, but it may be a while before the announcement comes. The timing will come with more experience, but it's pretty much common sense to keep a diary or put a reminder in Outlook for dates when an event timing estimate has already been given by the company. TH has years of experience and years of hard work under his belt. I'm going to throw out a guess that he's probably become an expert on several industries. Me? I just know one. If you want to start anticipating announcements, start with one industry you're comfortable with and then narrow it down to a handful of companies you're interested in.

well my specialisation i guess you would say is property, unfortuneatly LPT's arent looking too strong atm.. i get what your saying though and thanks for the advice, my outlook at work is becoming a tad fuller atm