From: floydb@rpi.edu
Subject: re: How can you hear announcements immediately??
Date: Thu, 12 Nov 1992 18:03:08 GMT

In article <BxL0xC.1GG@news.cso.uiuc.edu> schneid@uxa.cso.uiuc.edu (Mike Schneider) writes:
>I've been wondering what the fastest way to hear announcements is.
>Suppose some company announces that earnings rose 50% in the 
>first quarter.  How can I hear this right away?  Should I get
>FNN on cable?  Listen to some radio station?  If I see it in
>the paper like everybody else it's too late.  Also announcements
>like So-and-So has downgraded Stock X from hold to buy or whatever.
>Where does one hear these things quickly?
>
>I know I can read some notesfiles to find out about things.
>But when a note says "Company Y announced Tuesday that...."
>I wonder...how did they announce this?  And to whom?  And how
>can I get that info faster?  Any help would be appreciated!!!
>-- 
>!!! Mike Schneider *** schneid@jerry.stat.uiuc.edu !!!
>!!!     Assistant Manager of Systems Services      !!!
>!!!            Department of Statistics            !!!
>!!!   University of Illinois at Urbana-Champaign   !!!


A partial (and not all that satisfying) answer is that full 
service Brokers can tell you these things. They (in part) find
out such news items from the various wire services and analysts.
Dow Jones News Retrieval is one of the better known business news
services. AP and UPI handle similar data. On the Internet, 
Clarinet.com distributes "clari" news in approx. 50+ groups. All
cost money, though. Clarinet.com is available on our campus, but 
I have found that most releases are 1 to 2 hours late arriving
(why, I don't know).

Prodigy and Compuserve may also be benefitial, they both will be
faster than newspapers. 

To the best of my knowledge (limited) there is no one "clearing house"
for absolutely all business news. There will always (over generalization?)
be the exclusive story, investigative (un-announced) story, etc.

I can imagine the release of information like a wave found in a
pond where a stone has been dropped. The biggest splash occurs at the
center, subsequent large waves are generated near that, and ripples 
continue on out from there. If you are not making the splash (i.e.
insider information and all) then it will cost you real dollars to
be as close to the center as possible. As distance from the center
increases, cost of information decreases exponentially (e.g. $10/minute
news feeds near the center to $.50 for a newspaper the next day on
the newstands and $1.50 for a weekly dose of news, to free 
delayed daily/weekly info available in your local library). Those who
can afford to be close to the center may proportionally move the most
money with respect to any given story at any given time and thus
have the greatest impact on investments. Those less fortunate arrive
late at the party and cause lesser impact with their fewer dollars
(several orders of magnitude lesser, Billions vs hundreds).

The required trading dollar volume to break even, given commissions
and cost of trading-related services, and given the desired average
level of acceptable risk, is your limiting factor (e.g. 5% commissions
plus $250/month in news feeds for $1000/month in transactions would 
require approximately a 26% return on investment/month to break even).

no such thing as a free lunch

My guess is that it would be vastly cheaper not to read the news but
to read the repercussions. This data IS funneled through a central
clearing house or two (NYSE, AMEX, NASDAQ, CBOE, CME, etc) and is
considerably cheaper to get (especially with the standard 15 minute
delay option). While you won't get wet by the initial splash, you may
be able to ride the first big wave, instead of gently rocking with
the ripples. Focusing on one or two companies or industries might
increase your chances of correctly interpreting market actions,
given an adequate knowledge of the context, increasing your chances
of reacting appropriately.

Finally, news isn't everything. Anticipation of news more often than
not is where the action is (e.g. "Up on expectation, down on news").
Being practically in the center of a news release and reacting only
to it may result in misfortune, when everyone else was trading the
prior few days on expectations. The news event is anti-climatic
(e.g. higher than expectations/lower than expectations, stocks often
move contrary to the release of "absolute" good/bad news).

hope this helps

barry

Newsgroups: misc.invest
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