[Summary]
``Buy on rumors and sell on facts'' is an investment adage that suggests that stock prices rise due to expectations and speculation, but are more likely to sell when actual information is announced.
This is useful for understanding the ``exhaustion of materials,'' where stock prices decline despite good news.
What does it mean to buy on rumors and sell on facts?
In the stock market, stock prices can rise due to anticipation even before an official announcement is made.
Typical examples include new products, financial results expectations, alliances, policy themes, and AI-related materials.
However, when the announcement is made, investors who had been expecting it may take profits and the stock price may fall.
This is called "buying on rumors and selling on facts."
Why is it sold as a good material?
Stock prices incorporate not only current facts but also expectations for the future.
If expectations are too high before the announcement, even if the actual content is good, it may be perceived as ``within expectations''.
As a result, short-term profit-taking selling becomes more likely.
Scenes to be careful of
This saying is especially useful in the following situations:
- Stock prices have risen significantly before the earnings call.
- A theme is created before announcing a new product.
- Related stocks are being bought based on policy expectations
- Only expectations are ahead on SNS
Summary
``Buy on rumors and sell on facts'' is a saying that helps you understand the difference between expectations and reality.
We look not only at the quality of the materials, but also at how much the stock price has already factored in. Even if the news is good, it will be sold if expectations are too high.