I had a chat with a reader recently. He finds it very hard to invest in Singapore Stocks, because the stock prices does not move according to the expected reaction of the news. Some examples he quoted are:

1. Interest Rate Hike in the coming December - The day the fed gave strong hints that there will be interest rate hike in coming December, all stocks rise the next day. Why? (He expected the stocks to drop).
2. US$ strength will impact on commodities stocks - But the stocks will rise instead at times. Why?
3. Company report good financials but the stock price hardly move. Why?

I gave him a few reasons why the stocks move differently. However, after thinking it through, the only thing I believe is true is "The Market Is Irrational". This is because the market is make up of 3 different types of ......