Do you have an edge?
Defining what it is
Today, I was checking my AMGN in pre-market by going to Yahoo Finance and I began to notice little things that I didn’t even see.
Yahoo Finance has been a popular place to get information on stocks, news on the company, stock charts, and some basic information on Earnings. It now has analysis and expectations of the price movements of the company.
Most people, I guess, that are new will read it a bit more carefully than I would. But still the amount of objective data provided to everyone on the globe is amazing and provides both small minnows to whales the same information. Yet some win and some don’t.
There is a caution around information that is free. And there is confidence when paying for the same information. Yet investors seem to have the same results. So the edge they have isn’t there.
I feel that the edge most would have is if they are
Patient. That doesn’t mean not to be active. But be particular when you make an investment decision.
Understand the logic underlying readily accessible information (we should be reviewing this more)
Longer term picture. No one. I mean no one. Takes a big picture view to immediate excitement in the market. Most of the big money made is by taking the long term view on investments that are either cheap or not cheap.
Today’s example is Natural Gas. I am show you a chart from 1990 to the present. This is a futures contract that shows the active contract and the prices show the expectations of the future movement of Natural Gas.
It has been in a one way direction down. Anyone that was caught up in the excitement of a higher natural gas prices has been stung for 30 years. But if this logarithmic chart with trendlines have value. The last “collapse” of this price movement should lead to three options:
The price rallies to the upper trend channel to about $4.85
The price collapses to $1.00 or below. No sugar coating it. This recent movement in natural gas is ugly. A collapse for whatever reason (economic depression, glut, etc) can continue. But the same feeling people had when it was going up is the same depression they are feeling at these levels.
A 30 year bottom and secular bull market for this energy
Natural Gas
So here are some instruments to participate in this fossil fuel:
UNG
CHK
EQT
WMB
Have a pleasant day!