Masters in Business

At the Money: Lose the Noise

6 snips
Nov 20, 2024
Larry Swedrow, head of financial and economic research at Buckingham Strategic Wealth, shares his expertise on cutting through the clamor of market noise. He discusses how distractions from earnings reports, economic data, and news can derail investors. Swedrow emphasizes the importance of having a solid investment strategy and the pitfalls of market timing based on misinterpreted economic indicators. He also highlights the impacts of election years on investment decisions and urges investors to maintain focus to achieve long-term goals.
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ADVICE

Ignoring the News

  • Ignore news items, as the market reacts instantly to new information.
  • By the time you react to news, the market has already adjusted, making it too late.
ANECDOTE

Earnings Surprise Example

  • A company trading at $60 saw its stock price drop to $40 after a 100% earnings increase.
  • The market expected more than 100%, demonstrating that only exceeding expectations matters.
ANECDOTE

General Motors Example

  • General Motors' stock rose despite a 20% earnings drop during the Great Recession.
  • The market expected worse news, highlighting that only exceeding expectations matters.
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