Separating Fake News from Fact: Financial Edition
I spend a lot of time traveling to beautiful places in the world. A few months ago I spent a week in Seychelles. I stayed at the Raffles Hotel, which has stunning views.
I highly recommend it.
I hope you dream of traveling to some of the beautiful places I get to visit. If you can’t plan it now, then add it to your bucket list.
None of this would be possible without learning to trade and now teaching.
Seychelles was a combination of work and play. I did a bunch of crazy boat rides, played with sea turtles, and chilled on the beach.
We were working on the Save the Reef documentary, so it wasn’t all completely play, but also for a great cause.
Wouldn’t it be great if everything on TV was as straightforward as a documentary? No fake news, no television anchors or politicians spinning stories to try to make you see things their way. Just the honest truth.
The way news is presented has a huge impact, and not just on how we think, but on the market as well. I want to take some time to answer a question that I was posed recently:
“How Do You Judge the Quality and Veracity of a Press Release?”
I believe you need to pay attention to the news. News catalysts can have a huge impact on a stock’s price. This is especially true of penny stocks.
It’s so important to understand investing isn’t just about price action. I look at price action, charts, and news.
I want to take some time and walk you through a real world example of what I’m talking about so you can see how I interpreted the news to make a HUGE gain.
One of my big dollar winners was a play on Kraig Biocraft Labs Inc.
This former supernova is a company involved with using silkworms to spin spider-silk. They make freaking spider silk for clothing! It sounds like a scam, but …
… a press release on April 17 mentioned a partnership with Polartec.
Polartec is a big company. It’s not uncommon for a small company to mention a partnership with a big company. Over and over again I’ve seen this sort of press release drive price action. But it says in the press release they’ve been working on this since 2016. So, they’ve been working on this for two or three years and nothing’s really panned out. What gives?
They say the spider silk is so strong it’s military grade. So, they’re working to create military-grade textiles. Spidey-suits.
Here’s where it gets interesting and why I chose to go much bigger with this trade than other recent trades …
The CEO of Polartec was quoted in the press release. If you’ve seen my DVDs, then you know I really respect press releases when the big company is quoted. And especially when the big company mentions the small company. It can lend massive credibility to the press release.
In this press release, not only was Polartec quoted …
… and not only was Kraig Laboratories mentioned …
… but the big company gave the little company a big positive statement. Check out the quote from the Polartec CEO:
“This project combines two of our most important innovation missions: providing best-in-class textiles to our Nation’s military personnel, and our investment in a fully biodegradable product line. Our partnership with Kraig has the potential to be as revolutionary as when we created the first performance fabrics made from post-consumer recycled plastics in 1993.”
So, this press release was the kind I really love.
Here you have a mention of potentially revolutionary textiles that are biodegradable. You have the big company mentioning the little company. You have a strong positive statement. Wow.
I have no idea what this spider silk is going to do long-term. But when the CEO of a multibillion-dollar business gives spider silk and Kraig Labs a testimonial, who knows how high this could have gone? It had news, volume, and a big price move.
But I loved the press release.
Final Lesson: A Champion’s Resurrection
If you follow golf, then you know that we recently saw a huge victory at the 2019 Masters. Some pundits are calling it the comeback of the century.
I watched the Masters. It was fascinating to see how the winner picked his competitors apart toward the last few holes. There was a big bunch — maybe five or six players — tied with about five holes to go.
Then the champ turned it up. It reminded me of the 2017 Super Bowl and other close-call championship games. In whatever sport — it’s very close, standard work they do most of the time … but they know how to kick it up to another level when the time is right.
How does this apply to trading? With trading, you don’t have to be aggressive all the time.
But if you’re ready …
… if you’re prepared, you have studied, you have the right tools, and use the right brokers …
… then when the right pattern presents itself, you can be more aggressive.
Editor, Penny Stock Millionaires