Buy the rumor sell the news. Looking at chart of wells fargo in 2008 while reading Hank Paulson’s ‘On the Brink’. He’s detailing how Fargo was in the works to buy Wachovia around September 28th, and was working a potential deal, but had not locked anything in yet. I was curious as to how this was reflected in the chart. The Chart of Wells Fargo at that time shows a spike beginning July 16th and peaking September 19th at 44.79, then drooping from there with some rebounds in between but remaining in a down trend until the bottom of 7.7 on March 9th of 2009. The acquisition took place December 31st of 2008. It seems that everything was priced in, whether it was insider knowledge or market awareness. This is all to say that it’s too late if you’re buying into real time events. There are going to be people who know when know one else knows, and the only way it will be reflected often times is in the stock price. just like Moderna the other day with the Golden Sweep you learned about. Two days before a news piece about a Booster Shot, someone bought over $1m worth of calls expiring in two days, just in time for the spike from the news.
Must begin watching earnings plays. DOCU was an incredible play, right after earnings. Also, though you didn’t realize it at the time, one of the cleanest plays you were in in August was your SQ play, which was an earnings play, though they released earnings a week earlier than they’d said.