It’s the saying ingrained in traders’ brains from the moment they first look at the market:
Buy the rumor, sell the news.
Essentially, the old adage means that you should buy a stock before the company makes an official announcement and sell it when the news goes public. It allows you to take advantage of the big money.
But a recent move from social media giant Facebook Inc. (NASDAQ: FB) is flipping that saying on its head…
See, big-name advertisers are pulling out of FB left and right, sending shares on an 11% plunge in just two trading days.
But FB is the biggest social media company in the world. It will solve this problem – and it’ll come back shining like never before.
So today, we’re reversing everything you know to be true – we’re selling the rumor, and buying the news.