MICHEL PIREU: Cashing in on a crisis is not as easy as just listening for cannons
'Over the past year, the five biggest military stocks on US stock exchanges have experienced price jumps of between 33% and 93%, not counting dividends'
The old trading adage "buy on the sound of cannons, sell on the sound of trumpets" is often attributed to London financier Nathan Rothschild, who supposedly made millions after the Battle of Waterloo by using his early knowledge of the English victory to deceive bond traders on the stock exchange. As Frederic Morton tells it in his book The Rothschilds: A Family Portrait: "To the Rothschilds, [England’s] chief financial agents, Waterloo brought a many million-pound scoop.… A moment later, Nathan Rothschild … was on his way to London (beating Wellington’s envoy by many hours) to tell the government that Napoleon had been crushed: but his news was not believed, because the government had just heard of the English defeat at Quatre Bras. "Then he proceeded to the stock exchange. Another man in his position would have sunk his work into consols [bank annuities], already weak because of Quatre Bras. But this was Nathan Rothschild. He leaned against ‘his’ pillar. He did not invest. He sold...
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