How to read Financial news
- 1.Is the article based on data or opinion?
- 2.Is it descriptive of past conditions or predictive of the future?
- 3.Does the article have a testable hypothesis?
- Understand the consensus - Grasp the conventional wisdom in order to bet against it. This becomes easier once we do some groundwork over specific investment thesis. After reading relevant news, try to take notes.
- Seek disagreement - You need to understand the other side of the trade, by reading opinions that contrast with yours in order to avoid confirmation bias.
- Question the Narrative - Reporters are under intense deadline pressure and often frame issues in a way that is confusing or distorted.
- Data and source - Charts, tables, and numbers are good places to start for corporate results and economic data.