Reading the Financial Pages for Dummies®

Chapter 8. Sharpening Your Understanding

In This Chapter

• Reading the statutory announcements for fun and profit

• Understanding how the market values a company

• Considering why asset valuations can throw everything off balance

• Facing the dreaded pensions liability issue

I don't think I'm going to shock you too badly if I say that the financial media is really only one of the places to look for clues when you set out to choose a new investment. Or for news about how the investments you've already got are faring. In this chapter I explore some of the less obvious routes that help you fine-tune your strategy and hopefully pick up more profitable signals. Sometimes – just sometimes – the market isn't wrong at all when it decides to avoid a stock, or maybe even mark it down quite savagely. The market's often illogical but it isn't stupid. Ever been struck by how every fish in a shoal simultaneously changes direction in a split second, apparently without reason? And then, as often as not, the real cause becomes clear – a larger fish comes into view, or they've encountered a cold current. This chapter helps you understand the pack behaviour of investors: why they suddenly veer off in one direction or dodge out of the way without warning. You, too, can spot the subtle signs and know how to respond. But only if you know where to look....

Understanding Statutory Announcements

Trading updates, profit warnings, and interim statements – as you can imagine, a comprehensive regulatory system exists, which ...