The influenza news never stops. It has temporarily nudged the recession news aside. And when the recovery is complete there will be other news to nudge that aside. The electronic press swoops down upon a story and disseminates it at the speed of light and the public focus shifts nearly as fast. For the short term trader a little sorting out is necessary to keep making a profit and to keep from letting the news disseminators drive you crazy.
The thing about computers is that they are very fast and not very smart. That sort of applies to our electronic world too. The trader needs to keep up with the news and keep a file on various trading opportunities. The recession, looming recovery, and now the possibility of the current influenza strain causing a global crisis offer a multitude of trading opportunities.
There are recession damaged industries, recovery promising companies, influenza, anti flu drugs, vaccines on the horizon, companies whose stocks have been damaged by the influenza news, and companies whose stars are shining bright because of recovery stimulus money pouring into green projects to mention a few trading opportunities. The question we pose is when is enough, enough?
The point comes down to this. If you try to follow too many influenza related events you will not be there to execute when an opportunity presents itself on the first economic stimulus green stock you have been following.
Bob Woodward, in his book, “The Commanders,” tells how Collin Powell as Chairman of the Joint Chiefs of Staff, and in charge of the Pentagon’s super computers, started his day by writing out long hand on a note pad what his five or so main responsibilities were for the day.
When the news dissemination machine inundates you with influenza, recession, recovery news and more it may be time to get out the note pad, ignore the computer screen and make a very short list of what parts of the news are important. Old timers will tell you that being an expert in one, two, or maybe three areas will serve you well and trying to know everything about everything will lead to your downfall.
There is the matter of cross coverage though. Knowing the biotech stocks will help you deal with treatments for influenza when the next plague scare comes along. Knowing about influenza treatments will help you understand medical supply companies in the current market. The point here is to learn about interconnected companies, sectors, and events so that you can anticipate how a news event in one corner of the world, or the market, will have its effect elsewhere.
Whether it is influenza related, recession related, or a set of green stocks likely to benefit from the recovery stimulus money it is a good idea to develop a game plan and work within a market sector or related sectors to optimize your research and your trading results.
Then, when the news machine inundates you with too much information you can have two files, “This is something that is useful.” and “I do not care.”