I am currently on a business trip that has me on the southern French coast. Yes, not a bad place to be for business in August I admit. In flipping TV channels I came across CNBC Europe for a few minutes. The announcers had just commented that Soros fund management had sold a basket of energy stocks. Ok, I guess that is a fact useful for some, but I am not sure how it is useful to me. It was after that announcement that the commentators added their “spin”. They said essentially, “It looks like the smart money is selling, probably time to short oil.”
First none of us have an idea exactly of when Soros got into the stocks in question or why he got out. Are we supposed to take this factoid on CNBC, sell all energy stocks and short crude oil futures?
Trading requires a plan. It requires rules. The great traders do not take comments off CNBC and act on them. Unfortunately, the small traders most likely do listen as evidenced by the audience CNBC draws across the globe (yes it has shrunk, but millions still tune in). If everyone actually thought market news and opinion was junk science, they would not watch. Or would they?
The market will always have winners and losers. That is the nature of the beast. No matter how much education is out there, people will still look to “gurus” for the quick buck. And as long as the quick buck dreamers are out there, they will add liquidity to the market while padding the pockets of people that don’t care what Soros is doing. It is a big circle of money flows. Just always be aware of where you are on the market circle.
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