How to read Financial news

Three questions

  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?

Best practices

  • 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.


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