Information analysis is the one of the approaches mentioned in the Equity research 101. It is all about analyzing all the news and rumors about the stock market and the scrip in question. Let me tell you, it takes a lot to collect and analyze all such information. Today, we are in the midst of an ocean of data, until and unless you are sure of what you want, you are most likely to get lost. Thus the analysis never happens.
One can do information analysis if his network is pretty strong. For example he knows a few top notch brokers and analysts on Dalal street or he knows people who actually has insider information or he knows someone who actually spread rumors. Thus, it seems impossible for individual investor to trade on the basis of information analysis.
Sometimes people rely on their local broker and business channels to get information and breaking news. Let me assure you none of them works in your favor. As the local broker usually doesn't have any insider information and most of the breaking news on business channels are actually one week old.
So, my advise to all of you is to refrain from information analysis. Guys, never ever trade on the basis of a breaking news or so called rumors.
Will discuss the technical analysis and its importance in subsequent posts.
Cheers
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