Gyroscopic Investing

http://www.foxbusiness.com/investing/20 ... o-pay-off/

This article says that there is a 75 percent chance your investment will pay off if you buy before a fed announcement.

I know what PPer's will think about this but are there really people out there who make investment decisions this way?

People make investment decisions based on things that are a lot dumber than that.

Google "Elliott Wave".

Here's what I don't get in an article like this from a "solid" news organization like FoxBusiness......

"You have a minority of players willing to make the bet and they will be very well rewarded,”? he said."

Hmmmm..... did this article tell you when to sell the stock that you purchased before the fed announcement to make a killing?

Was it implicit in the article that you buy the day before the announcement and sell the next day? Having never played in this kind of game I plead ignorance. Do people really do this?

notsheigetz wrote: Was it implicit in the article that you buy the day before the announcement and sell the next day? Having never played in this kind of game I plead ignorance. Do people really do this?

I didn't read the article but you can profit from event volatility using options.  Though usually buying the very previous day is a losing proposition as the implied volatility would likely be high already and would collapse upon the actual event.

MachineGhost wrote: I didn't read the article but you can profit from event volatility using options.  Though usually buying the very previous day is a losing proposition as the implied volatility would likely be high already and would collapse upon the actual event.

I'm sticking with working for a living.

Seems like if you did this trade yesterday you made some money.  Of course, if the Bernanke had announced no QE3 you could have just as easily lost your shirt...

Storm wrote: Seems like if you did this trade yesterday you made some money.  Of course, if the Bernanke had announced no QE3 you could have just as easily lost your shirt...

I think either way, the volatility would have increased because dashed expectations is just as bad as expected.