Don't You Ever Trust Them Headline News

I got so excited when I saw the headlines.

Them foreign funds are backkkkkkkkkkk and they are buying!

This is a must read news clip for me. So there I was getting all excited reading the news piece.

• Foreign funds buy RM3.8b stocks in two weeks
  
  By Goh Thean Eu Published: 2011/05/09
  
  Analysts, however, feel it is too early to conclude that the buying spree will be sustainable over the long term.
  
  Kuala Lumpur: Foreign funds were net buyers of Malaysian stocks over the past two trading weeks.
  
  Analysts, however, feel it is too early to conclude that the buying spree will be sustainable over the long term.
  
  Since April 20, foreign funds bought shares worth RM3.8 billion, while they sold about RM3.4 billion worth of shares, which translated into a net purchase of about RM320 million worth of shares.
  
  Foreign funds were net buyers for nine consecutive days beginning April 20.
  
  During the period, the FTSE Bursa Malaysia KLCI rose almost 10 points, or 0.7 per cent, to 1,531.47. However, foreign funds were net sellers in the last three trading days.
  
  Analysts said there were several factors which spurred the buying activities.
  
  "I think the foreign funds are just mainly trading and buying blue chips on pullback. Perhaps, they are averaging down," said Jupiter Securities head of research Pong Teng Siew.
  
  Other factors which may have sparked the buying spree were the underperformance of the Malaysian stock market, as compared to regional peers.
  
  Foreign funds were mainly net sellers in late January 2011, as they were concerned about how emerging markets like Malaysia will cope with rising inflation.
  
  Although the inflation fears have eased, investors' sentiment remained bearish as they are worried about the global economic outlook over the near to medium term, driven by below-than-expected data from the US as well as signs of slowing down in China.
  
  "Nevertheless, I think the increase in the interest rate could help keep the foreign funds interested for a short while," said Pong.

Err.... That statement in red made me wonder about the headline news.

• Since April 20, foreign funds bought shares worth RM3.8 billion, while they sold about RM3.4 billion worth of shares, which translated into a net purchase of about RM320 million worth of shares.

Comeon.... given the above statement, just how on earth did they conclude that the best fitting headline is that " Foreign funds buy RM3.8b stocks in two weeks ".

Comeon... during that same period, they SOLD just as much.

Yeah they sold only 3.4 billion worth.

Which meant that only rm 320 million net purchase was made.

rm 320 million, that's about it.

Well think about it.

In two weeks, there are 10 trading days. Which means that a net purchase of 32 million worth of shares were made daily.

And 32 million worth of shares? Is that a lot?

Let's see, how about the following 2 headlines.

" Foreign funds buy RM320 Million stocks in two weeks "

" Foreign funds buy RM32 Million stocks daily for past two weeks ".

Would those two headlines generate as much excitement?

Of course not.

>Yeah, don't you ever trust them headline news. You better read the rest of the article!