Quality of investing news

 Not all financial news is created equal. Some headlines are outdated by the time they reach you, offering little to no edge for making investment decisions. Still, certain news items—though delayed—can signal worthwhile actions.

 

To evaluate the usefulness of investment-related news, I group it into five categories, ranked from “A” (most actionable) to “E” (mostly noise). Keep in mind that using true insider information is illegal—but unfortunately, enforcement, especially among politicians, remains weak. Let’s hope that changes.

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A. Policy-Level News (Highest Quality)

This includes announcements from the President or top government officials. For example, in 2025, Trump could move markets up or down simply by announcing or delaying tariffs on China.

Politicians also have access to proposed legislation that may benefit specific companies or sectors—giving them a powerful (and often unfair) edge.

💡 Tip: News from decision-makers is extremely market-sensitive, but by the time we hear it, it’s often too late. A simple strategy? Buy on the dip, sell on the rebound—riding the volatility caused by these announcements. Be warned: it does not always work and use stops to limit your losses.

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B. Insider Moves by CEOs and Gurus

When company insiders or major investors act, pay attention. These individuals know what’s coming. For instance:

• A pharmaceutical company’s stock may skyrocket after a successful drug trial.
• Buffett quietly sold much of his Apple stake a month before the EV project cancellation became public.
• His partner Charlie Munger made huge gains from early investments in BYD, China’s EV giant.
• Buffett’s move to buy five undervalued Japanese stocks was followed by a price surge.
• In early 2025, Buffett has been accumulating cash; one estimate is as high as 50%. It would be risky if the US dollar depreciates caused by our huge national debts.

💡 Tip: Track insider buying and selling using tools like Finviz. Follow major investors—but be cautious; the news is often already priced in.

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C. Institutional Disclosures

Mutual fund managers and institutional investors are legally required to disclose their holdings, often quarterly. While helpful, this data is usually dated by the time it becomes public.

💡 Tip: Monitor trends, not individual trades. Look for what sectors are being accumulated or exited.

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D. Financial Media Commentary

TV analysts and financial news networks provide broad market updates. While informative, these stories are often too general or already baked into prices.

 

Example: “Ukraine war continues” might not be breaking news, but it can imply strong tailwinds for defense contractors. Similarly, a bumper crop of coffee could suggest lower coffee prices ahead.

💡 Tip: Use common sense. Think beyond the headline—apply macro logic to identify opportunities.

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E. Public Chatter (Lowest Quality)

If your barber, neighbor, or the proverbial shoe-shine boy is giving stock tips, you’re probably too late. Widespread awareness often signals a market top.

💡 Tip: In some cases, doing the opposite of the crowd can be surprisingly profitable. Watch out that the peak could be there, and could be followed by a downfall.

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ChatGPT rewrote my article making minor changes, and the writing is in the expert level.

This article will be included in my book "Art of Investing 5th Edition" available from Amazon.com.

DeepSeek rated this article 8/10 with some recommendations. I did not take the recommendations, as they are more 'what if'.