Editor’s note: This article was first published in September 2010 right after Gamesa shares jumped on news of two large contracts in China. Gamesa later merged with Siemens’ wind business (Siemens Gamesa, 2017) and was delisted after Siemens Energy took full control in 2023.
As some of you already know, Gamesa has taken off on the stock market after signing two mega-contracts in China. The difference between being well informed and not can be the difference between making thousands or even millions of euros and making nothing at all. Many investors were waiting for Gamesa to hit bottom before buying in.
It’s what Warren Buffett describes as investing in a company that is going through temporary problems rather than waiting until it’s on the operating table. Well, the plane took off and some of us were left on the ground for lack of information: had we known they were negotiating with China, we wouldn’t have waited so long.
I’ll chalk that one up as a miss on my investing record.
That’s the kind of information you need when you decide to invest in the stock market. It’s what separates someone placing a bet from someone who plays with knowledge.
The early birds had the chance to make a lot of money in a single morning, and even more in 48 hours. The question now is whether it will keep rising at the same pace as these two days. That is completely unpredictable.
So if you decide to invest in the stock market, do it in companies you know that are involved in expansion projects, new contracts, mergers with larger companies and so on. It’s the best way to avoid unnecessary risks, and it’s certainly what makes the difference between turning the stock market into a profitable business or a risky one.
Now, if you’ll excuse me, I’m going to go back to banging my head against the wall 🙂
Featured image: Scottish Government, CC BY 2.0, via Wikimedia Commons.
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