Every day, financial news is flooded with market analysis like why a stock went up or down with a catchy title.
Apparently, there is a huge market for these types of news. However, if you want to be a better investors, you have to filter the junk information from useful information.
Is market analysis bad?
The market analysis itself is not that bad. However, once this information goes into a human mind, we tend to get influenced by it. We are inclined to act according to the news and we act irrationally.
Link to the Article.
(Source: Barron’s.)
Link to the Article.
This two news (above) came a day apart and they try to give reasons to why the market was up and down. (I have nothing against Barron’s. I do follow them as they have other great information)
Maybe they are correct on their analysis, but it does not matter much to long-term investors.
Final Thought
If investors can identify the difference between market analysis and business analysis, they will be benefited greatly.
Since the business analysis focuses on the fundamentals of the business, investors can use this information to make investment decisions. Among so many other things, this is the core concept of value investing.
Check out our analysis of Alibaba (BABA)