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Comment by Priem19 | Hacker News Reader

“Buy the rumor, buy the news.”

What does that mean?

It's a satirical comment on Tesla's meteoric stock price growth. The traditional quote is "Buy the rumor, sell the news"[0]. But with $TSLA, there's been nearly unbounded investor optimism.

[0]: https://www.thebalance.com/what-does-buy-the-rumor-sell-the-...

Some stock traders try to buy stocks based on news/rumors, other based on analyzing fundamentals about the company, others by looking at graphs and predicting patterns. They all hate each other.

Thank you for my loudest laugh of today.

Interestingly it seems like the best strategy is direct indexing - buy every stock directly (skip S&P ETFs), then spend your research time deciding what to exclude instead.

Nobody is offering this yet at scale because of transaction costs.

Why is that direct indexing and not just buying stocks? What index are you tracking?

Buying stocks implies you choose what to buy, but here you buy everything (following an index) and sometimes exclude things.

It's called "direct" indexing because you don't buy e.g. an S&P ETF. Along with letting you make some decisions, it's more tax optimal.

I'm not sure how effective that strategy is if you exclude the last 2-3 years.

2008-2018 definitely behaved differently from 2018-2020 but there were some issues with passive investing in ETFs. The best strategy was to never sell anything, but if you own an ETF and it changes the index (e.g. a company becomes too large to be small-cap) then it's going to sell it.

There's a saying that goes "buy the rumor, sell the news" [1], he's making a joke about buying in both occasions because the Tesla stock has been on a huge increase that few foresaw and seems to have no end to the climb. At the same time it's worth more than all other car companies combined, and many call it a bubble.

[1] https://www.davemanuel.com/investor-dictionary/buy-the-rumor...

It’s a joke. “Buy the rumor — sell the news” is an old saying about investing in stocks.

Tesla’s stock has been skyrocketing, so why sell at all?

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