I have created Google Alerts for all the stocks that I own. If there is news about them somewhere on the web – I want to read it. Usually, no news is good news and when I get an email about a stock I own — it is often bad news.
I have always felt that sad and depressing news does better than good news. That’s the reason newspapers are covered with news articles about accidents, scams, robberies etc.
I think that this is true for stocks as well and I have seen that this influences people in a certain fashion. I know a lot of people who bought AIG, Citigroup, Goldman and other financial stocks — right at the time when they were doing badly.
Since these companies were doing badly — they got quite a lot of media attention — and that led to many people thinking about these companies and wondering whether they should buy their stock.
Eventually,Â a lot of these people did end up buying these stocks because they thought they were trading cheap relative to the bad news surrounding it.
Most people don’t subscribe to investing and business magazines to discover stock ideas, so the way they discover stocks are through newspapers and TV. Newspapers and TV usually lean towards coveringÂ bad news and hence a lot of people get into stocks that are surrounded by bad news. This may just be reinstating — any publicity is good publicity, but I think it works in stocks.
Have you seen such a thing happen with stocks?