"Buy the rumor, sell the news" V2.0... First, V1.0 was the case where news was good, motivating people to buy in, raising prices. In this case, one shouldn't sell the instant the news breaks, but at that moment one should become a "seller", watching closely for the best time to sell.
In V2.0, the rumor was good (bc, who would buy on rumors of disaster?..) But the news breaks and it is bad news. In this case, one "sells the news" as soon as possible to cut losses.
So, whether the news is good or bad, one should be ready to sell on news.
Unless... The V3.0 case.. the news is so good that it confirms the viability of the stock & company as a long term investment. In this case (VERY RARE here in sub-pennyland), one might consider buying a larger position in the stock before the price rises too much.
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