As a newcomer to share ownership on a small scale I am puzzled by the reaction of the market to the annoucement of Tesco's bumper results for the past year. Their shares have fallen slightly at the time of writing? Yet the share price of other companies often seems to rise quite dramatically, somtimes just on the rumour of increased profitability or on just the hint of a possible take over bid? Any comments on why this should be so would be appreciated. Thanks.
Tesco Shares?
Apr 25, 2006
4 Replies
Results seemed very good to me, but I guess the market was expecting even better,
Tiddy Ogg.
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Usually its because people expected this, so the rise had already happened. There is a well known saying "buy on the rumour, sell on the news" which fits well with your second observations.
At 10:40:25 on 25/04/2006, Tumbleweed delighted uk.finance by announcing:
Also, they stated that the rise in profits had slowed towards the end of last year and they expect it to continue slowing.
It's already priced in, maybe the results weren't as good as many were expecting? Or it could be down to simple profit taking.
Simple logic can lose you a lot of money!
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