Buy The Rumor Sell The News AND Make Money From It
** WARNING ** Watching this video will have you making money in the stock market and spending no more than 10 minutes a year doing so...
Watch the video NOW!
"Buy the rumor sell the news", if you have ever read and heard anything written about the stock market from financial media you have undoubtedly heard this phrase before.
It is a catchy phrase, however, what good is a phrase like "buy the rumor sell the news" unless you can make money from it?
Exactly, I can see you shaking your head up and down right now!
Luckily for you, you have landed on this page. The video above will show you a strategy that utilizes the term "buy the rumor sell the news" to make you money.
And what's the best part about it?
The best part about it is this strategy is:
- You don't need to know anything about the stock market to take advantage of buy the rumor sell the news
- You only need $250 to buy the rumor sell the news
- You will only be investing four months out of the year
- You will only need 20 minutes A YEAR to buy the rumor sell the news
Above is the YouTube video. Feel free to share it with your friends as this video can be very useful for people interested in making money in the stock market while not spending a lot of time doing so.
Transcript of Buy The Rumor Sell The News Video
Transcript of Buy The Rumor Sell The News
00:00 Steven Brooks: Hey guys, this is Steven. I'm super excited to have you on here today. I got a really, really, really cool one for you guys today. A lot of people have been asking me recently, "Steven are there better times than others to invest in the stock market?" And, actually, we did find out a couple for you guys. I love this photo here. You'd be smiling too if you knew how easy it was. I think one of the things that deters people from making money in the stock market and be able to actually open up their own account and invest is, they feel like it's so, so, so difficult to make money. One of the things that we do at Stony Brook Securities is show you guys the easy way how to do it. So, my hope here is by the end of this video, and it shouldn't take too long, I'm gonna give you guys an awesome strategy that's really, really easy, that's not gonna take a ton of time, that's gonna make you smile because you're gonna know how easy it is.
00:42 SB: So, we have about 195 people on this webinar right now. Give me a one to say hello. There we go. Hey Jerry, how you doing? Bob. Good to see you again. Joe, you're on every single one of our videos. You're crazy. Alright, so anyway. Most people do know me, but for those who don't know me, my name is Steven Brooks and I'm an investor coach. I've been seen on Forbes, Money Magazine, Barron's, and CNBC. And I don't really like to talk about my accolades or how I've done in the past or all the publications I've been on. I just wanna let you guys know that the top, top level stuff, I've been on it.
01:15 SB: So, one of the problems that people have before they get into investing is that they feel like they don't have enough time to invest. Now, I completely understand that. Investing financial markets are a really big beast. In a given day, there are tens of trillions of dollars that change hands. I mean, that's pretty overwhelming and at the same time, they're global markets. It's a 24/7 market nowadays especially with the advent of some of the great technologies. So I get it. And a lot of people say it takes 10,000 hours to really learn something and master something. And people think that really holds true in investing, and especially it might even take more because it's such a big thing. There's so much competition.
02:00 SB: But I'm here today to tell you that it takes far less time. Far, far, far less time to make money in the stock market. How many of you guys wanna learn how to make money in the stock market by not spending a lot of time? Awesome. And the next question I have for you is, do you have five minutes every three months? How many of you guys have five minutes in the next three months? Give me a one in the chat if you guys do. There you go. Yeah. There you go. Wow. Wait, I wanna sit here and count real... There you go. So that's like 80 people. That's awesome, that's great. That's almost half the people on this. That's awesome, there you go. It's trickling in. I'm sure everyone's gonna do it. But how many of you have five minutes every three months? How many of you guys wanna hear about a strategy that's gonna make you guys money only spending five minutes every three months? There you go, exactly. How awesome is that?
02:46 SB: So, what's my goal here for this video? So a lot of people, obviously, with stock market again, big, overwhelming, a lot of fear of losing money. They say they can't do it and in this case specifically, and what we're talking about in this video is most people feel like they don't have enough time to do it because they don't have enough time to master the market or to learn strategies or to research companies or to know about geo-political events. They don't have enough time to invest. But the truth is you can, so we're gonna take that can't do attitude and we're gonna turn into a can do attitude by saving you time. That's a really, really big deal. A lot of people would invest in the stock market if it didn't take so much time, in their opinion. And just like my buddy Glen here.
03:28 SB: So Glen is one of my first students and he was always interested in the market. He would watch CNBC because it's an entertaining show, but he never really wanted to get in. He felt like all the commentators on CNBC knew so much more about him. They had been in the markets for 40 years, so they knew so much more than him. And there was no way he'd ever be able to actually compete in markets where they were. And I totally get that. However, I showed Glen this same strategy and this same study that I'm gonna end up showing you guys here in about two minutes that really opened his eyes. And the cool part about this, is the that for last so... He's been one of my students for over two years now and he only spends about an hour a year investing and he kills it. He makes 18% a year. How many people would love to make 18% a year just spending an hour a year? Exactly. Yeah, there you go. That's so cool. That is so cool. Yeah, so it's great.
04:23 SB: So what I want to talk to you about today, in terms of not having to spend so much time investing and to saving you time to actually make a lot of money, is this concept of buy the rumor sell the news. So how many people have heard of buy the rumor sell the news? Put a one in the chat if you've heard of buy the rumor sell the news. There you go. Yeah, exactly. So, buy the rumor sell the news is a concept of people buying rumors. So there's a lot of rumors on Wall Street, it's very difficult to have something not be known, especially with social media and the internet. It's very difficult for something not get out into the public. So, they buy the rumor into a specific binary event. So a binary event is a one-time event, right? A one-day event. So they buy the rumor into that and there's a lot of expectation and there's a lot hype. There's people feeling really, really good about it. And what typically happens is, these stocks that are part of these rumors will go higher up until this binary event because people are really, really thinking it's gonna work out really well. And then once that event happens they sell off because A, the expectation or what they were looking to see happen in that binary event isn't as good and there's no more rumor to really inflate the stock.
05:33 SB: And we see this a lot in acquisitions. So if Company A is thinking about buying Company B, both stocks might go up because there's a lot of hype about it. And then once the acquisition comes through, it sells off because there's nothing to do there. And the same with FDA approvals for drug companies, jobs numbers, same thing there. But what I wanna talk specifically today is about earnings. So how many people know about earnings here? Give me a one if you guys know about earnings. There you go.
Looks like a lot of people know about earnings. And the interesting thing about earnings is every single public company has to give quarterly earnings to Wall Street once every three months, so once a quarter.
06:11 SB: And those quarterly earnings go to analysts, they go to publications, and they go to shareholders. And then those numbers and those earnings reports give everyone an understanding of the lifeblood of the company and, specifically, how the company did in the last month, and how they project to do over the next year. So really just a lot of data and statistics about the companies. And one of the really interesting thing is, every single quarter these companies give their earnings and, typically, buy the rumor sell the news plays really, really true there. So what's funny about buy the rumor sell the news is that most of these videos we make are to disprove some belief that Wall Street has. So we look at data, we do a study like we did here, and I'll show you in a second, we look at data and we disprove some of the things that Wall Street says.
06:57 SB: This one actually works. So buying the rumor, sell the news actually works. So because buying the rumor sell the works, do you guys wanna find out how to make money from it? There you go. Yep. So it looks like a lot of people wanna learn how to make money from this. Great. So we're gonna show you the rest of this video how to make money from the concept of buy the rumor sell the news. And, like most things that we do here, we wanna get data from the past, not because it's gonna predict the future, but data in the past will give us confidence and reasonable expectations about these strategies moving forward. So again, if we had a strategy that doubled our money every single year, that doesn't mean it's gonna double our money moving forward; however, it gives us pretty good confidence that, hey, it looks like a good strategy and we can move forward with it. So what we did here, and again, this strategy is to prove that buying the rumor, selling the news is a great strategy and exactly when to do it. So what we did is we went back the last 27 years in the S&P 500, right?
07:53 SB: 27 years of data. That's a lot of data. And the reason we did it in the S&P 500 is twofold. Number one is the public data is really easy to get for the S&P 500, and number two, it's the most viewed index in the stock market. It gives you a nice snapshot of 500 large, popular companies; some technology, some energy, some manufacturing, some healthcare, some consumer staples. So it gives you a really nice diversified look at the overall stock market. So we do it in the S&P 500.
Now, to show that buying the rumor, selling the news is a good idea, what we did is we bought the first month of every single quarter and we sold at the end of that first month. So remember, companies give their earnings once a quarter.
08:38 SB: It typically doesn't happen in the first few weeks of the quarter. So, the news is happening typically after the first quarter of the month, especially with the most popular companies. So we are buying the rumor of earnings being really, really good here, if that makes sense. And then we're gonna compare it to what if we bought the third quarter? After the news was out and then sold it at the end of the quarter? How would that be? Alright, so how would that be? So, let's take a look. Again, we're buying the rumor here. We're not necessarily selling the news, but we're either buying the rumor or we're buying the news, right? So when we're buying the first month, we're buying the rumor. We're buying the third month, we're buying the news, and we're gonna see how they work out. You guys ready? You guys wanna see the results? Give me a one if you wanna see the results. There you go. Okay. Okay. Ready? Good. So here's a chart. Here's the information.
09:31 SB: First, take a look at the gray line. The gray line is buying the news. Think about it that way. So it's buying the third month of every quarter. So at that point, most of the companies have given their earnings announcements. So there's less rumors out there; everyone's already given their data. If you had $10,000 in an account back in 1990, it's now worth about $15,000. By the way, 50% is a great return in your investment. I would take that any day of the week. However, buying the rumor, which is the first month of every single quarter, and then selling at the end of that month, had triple the returns. So if you started with $10,000 you ended with $25,000. So you were three times more profitable in this scenario buying the S&P 500 in the first month of every quarter as opposed to the third month of every quarter. So the way to think about it is, buying the S&P 500, in terms of buying the rumor, selling the news of overall earnings, is three times more profitable than the other way around, right? So this graph here gives proof that buying the rumor, selling the news does work. So, now let's break it down to the numbers real quick. So if we bought the S&P in the third month in the quarter, we gained about 52%.
10:46 SB: Again, that's a really great return. And we were right 54% of the time, more than half. I mean, that's really good. And we averaged about 0.15% every single quarter. These aren't bad numbers. However, it's more advantageous and more profitable for us if we bought the first month of the quarter. We could see we made three times as much money. We made about 150%. Instead of being right about half the time, we were right 2/3 of the time and we made about 0.44% every single quarter. So this is really, really valuable stuff. Remember, this was back-tested for 27 years. That's a really big sample size. And in that time we saw a lot of ups, we saw a lot of downs. So we have seen both sides of the market, it hasn't just been an up market in this time. We saw the bubble burst, the dot com bubble at 2000, and then 2008, 2009 was an ugly, ugly, ugly financial crisis. So again, the numbers show that buying the rumor and selling the news does work. Alright, so how are we gonna do it? Well, for starters it's very difficult for non-professional traders and investors to invest in the S&P 500 itself. So the best way to do it is to invest in SPY. So that's the S&P 500 index ETF. It tracks point for point, tick for tick with the S&P 500. The only caveat is, it's a tenth of the size.
12:03 SB: So, if the S&P 500's trading for 2,000, SPY is gonna trade for $200 a share. And remember, this trade, we're buying the rumor and then selling the news. So, let's buy the rumor. The first day of the quarter: The first trading day in January, the first trading day in April, the first trading day in July, the first trading day in October, we're gonna buy SPY. And we're gonna get out of there before the news even hits. Right?
So, we're gonna... The last day of the first month: The last day in January, the last day in April, the last trading day in July, the last trading day in October, we're gonna sell those shares. That's literally it. That is it. That is buying the rumor and selling before the news even happened.
12:42 SB: Here's what SPY looks like. To do this, it's gonna cost you 242 bucks for one share. That's it. That's all it's gonna take. Now, a lot of people are saying, "Steven, Steven, Steven, what do I do for the rest of the year?" Well, I don't know. Go to a beach. [chuckle] Hang out. You've made your money. You make 150% on this and it's three times more profitable than other months. So, you can go to the beach. And again, here's the expectations. We're buying the rumor. And we're getting out before the news even hits. That's the orange line. The gray line is buying the news. We don't wanna do that, we wanna make as much money as possible. The truth is look, a lot of people are saying, "Steven, I don't have enough time." But you know this takes only a couple of minutes every couple months. What are you waiting for? And I know and I hope that just because when I'm reading the chat, is a lot of you guys are saying, "You know what? This is pretty easy." It's not gonna take you... It doesn't take you 10,000 hours to learn this. You just learned it in the last 10 minutes. What are you waiting for? What are you waiting for? Really. What are you waiting for here? There's nothing holding you back. You can commit to this. You can take action. And you can absolutely do this. All of you can do it.
13:48 SB: So, let's recap one last time exactly how to do this. Right? We're gonna invest in SPY because it's difficult to invest in the S&P 500. SPY is the S&P 500 index ETF. It tracks the exact same price movements. Just one tenth of the price. On the first day of the first month of every quarter, so the first day of January, first day in April, first day in July, first day in October, we're gonna buy SPY. Right? So, we bought our shares; we have it now. Then, on the last day of the first month, so January, the last trading day in January, we're gonna sell the shares that we bought in the first trading day of January and so on for April, July, and October. Alright, we're gonna do that. And we're gonna rinse and repeat that. We're gonna rinse and repeat that til the cows come home. And we can expect to make three times as much money by buying the rumor and not selling the news, selling before the news as opposed to buying the news.
14:41 SB: Super happy you guys could be on here. Just looking by the chat, there's been a lot of great feedback. I'm super excited about this. This doesn't take more than a few minutes every couple months. It's really awesome. You don't need crazy amounts of time to make money in the stock market. We just proved it to you. If you have any questions, email me at firstname.lastname@example.org. I'll try to answer in 24 hours. This is great stuff. I hope everyone takes action, commits to this, and starts making some money.