If you still buy a stock base on news paper...

Many investors read the financial news paper and hope to make some profit from the news. How nice if one can read tomorrow's news paper today! However, base on my experience, it's not easy to make money in stock market by just look for this kind of tips. Sometime, it could be a trap! I had friend who bought a stock base on news paper's recommendation and hold the stock for more than 10 years... guess what's his return? It's a negative 50%, no joke, if he were to sell the stock today, then only get back half of money compare to original cost! To me, this is really a trap, as they never tell you when to sell, or in the worst case scenario, which point should the investor cut lost?

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The stock market basically is a game for trader! We can find very experience old bird and new bee without and knowledge. Beside, we have business owner and directors of company, all of them come to stock market with one purpose, making money! They may create different types of trick or pattern by involving the reporter to achieve this purpose. This is one of the way how the “old bird” distribute their stocks to retail investors. Since they had a lot of stocks on hand, they need someone to tell a story so that they can sell their stocks in big volume without causing the stock price to fall. This is one of the reason why they may push a stock price to go up!  (of course, we have small percentage of business owner, who is the good business man and they may not do this)

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Let see from the reporter point of view, they are thinking day in and day out, how to attract reader and increase the reading rate? Yes, find out what most people want to read and just write or sometime create a story. Since most people looking for market tip, they may just give one or two stock everyday. Some reporter will find out which stock on the move now and write something about it. Or may be, tell which company give the most dividend last year or who is the most potential company in next few years. Again, who doesn't know your mother is a women, most investors already know but may be they forgot?

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Of course, we do have some responsible reporter, who try their best interview the business owner and give the fare view on the company instead of the business owner ask them to write what they told. However, it's really hard to tell who is telling the truth and who is not.

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It's nothing wrong to read the financial news paper. However, we need to upgrade our level, equip ourselves with financial knowledge, knowing how smart people playing the stock market game. Then we may play the game according to the rules. Stock market, capital market or what ever market, there's always a supply and demand, who drive the price up and down. When the supply is equal to demand, the price will stable as buyer and seller are balance. If something happen, the price will move to one side. This imbalance will need to find some point where buyer and seller agreed with, then only we will see the balance situation again.

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Having the knowledge of knowing the trend of the market is the key to the millionaire road. Don't just buy or sell a stock base on news paper!

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