But before we get into how, let’s look at the power of blogs.
Years ago, Dan Rather was brought to his knees because of blogs… so was CNN news chief Eason Jordan and a bike lock maker.
All three had fallen victim to a powerful force sweeping the Internet… an electronic tidal wave known as blogging. But while blogs have ruined reputations, ended careers and brought corporate giants to their knees… they’ve changed the way information is disseminated to the public.
Remember the tsunami that wiped out Southeast Asia? Blogs didn’t provide the same scripted reports as the stuffed-suit anchormen. Instead, bloggers posted graphic pictures, horrifying descriptions and raw footage of the devastation.
The result – heartbreaking reality that flashed around the world and helped raise more than $1.2 billion for the tsunami victims, with 85% of the funds coming from blog readers and individual donors.
- After 25 years as CBS news anchor, bloggers caught Dan Rather using false documents to question President Bush’s military service. Bloggers went nuts, pounding away at the issue relentlessly, forcing a CBS internal investigation, and ultimately Rather’s resignation.
- …as did CNN news chief Eason Jordan, who thought he was speaking off the record when he said that US soldiers had killed members of the media in Iraq. Bloggers didn’t like the comments and eventually "forced" Jordan to resign after 23 years with CNN.
- When a bicycle blog revealed that a bike lock maker’s u-shaped locks could be picked with a Bic pen, the company ignored blog criticism. Big mistake… It wasn’t until bloggers pounded the company with negative PR that the lock makers finally realized the issue could cost them up to $10 million.
Lesson learned – Blogs were impacting everything from media to business, from education to entertainment, and even politics.
Blogs Are Also Ultimate Insiders
In many cases, blogs are posted and written by industry insiders, which means that you’re getting exclusive, confidential information long before most of the world hears about it.
"Blogs are like a million little cameras and tape recorders," a founder of a medical technology company once told the Miami Herald.
They allow you to peek behind the scenes and into the laboratories, planning rooms and even the boardrooms of the world’s hottest companies… even classified information regarding patents, trade secrets, innovations, licensing agreements, negotiation breakdowns, and all kinds of juicy information that can determine eventual stock movement.
"A good blog… lets you see behind the scenes," said a blogging expert in Economist magazine.
In fact, it was a New York Times blog editor who was questioned by other journalists over the validity of Apple’s CEO’s health claims:
Last week, when Steve Jobs announced that his recent weight loss was due to "a hormone imbalance," I got calls from reporters and others (which, I must admit, I ducked) asking me if that was the medical problem he had confessed to when he and I had had our infamous phone call last summer – the one where he called me a slime bucket and denied that he had a recurrence of cancer. The answer is no, it wasn’t. It was something else – which of course I still can’t disclose because the conversation was off the record.
Even a gadget blog called Gizmodo rattled the Apple cages, with allegations that Apple misled the public about the reasons for Apple’s exit from Macworld Expo.
The blog simply cited a source which was reportedly "100% correct" when providing information and photos of "unreleased Apple products in the past." That same source reportedly "passed on information charging Apple with misrepresenting the reasons behind its pullout from Macworlds and the cancellation of Jobs’ keynote address," adding that the "real cause is his [Jobs] rapidly declining health… it may be worse than we ever imagined."
Worse, according to the source’s unedited copy:
"Steve’s health is rapidly declining. Apple is choosing to remove the hype factor strategically vs. letting the hype destroy Apple when the inevitable news comes later this spring."
"This strategic loss will be less of a bang with investors. This is why MacWorld is a no-go anymore. No more Steve means no more hype. Saying they are no longer needing [MacWorld] is the cover designed by the worldwide "loyalty" department."
Unfortunately for Apple, they declined to comment. And the blog simply billed it as a rumor, hoping that it was "absolutely wrong."
But as we all now know… it wasn’t.
No wonder CNN once reported that "workers with weblogs are everywhere, and they’re starting to make corporate America very nervous."
Take a Look at How Using a Blog to Trade Generated 246% in Just Five Days…Back on February 15, 2004 around 6 a.m. EST, an emergency response blog posted information about a prototype camera about to undergo testing… and we also learned that Homeland Security loved the camera because of its unique ability to take 360-degree images, which was important in a post-9/11 world.
The blog also implied that the camera could revolutionize surveillance and positively impact Homeland Security operations and surveillance.
Knowing the camera technology was hot, we recognized it as a lucrative investment opportunity for my "trade the news" readers. After all, if a camera could see in every direction, it was natural for the Department of Homeland Security – and every other surveillance and security business on the planet.
That company was IPIX. And it didn’t take long for its name and stock to begin jumping as blog "buzz" was being generated.
Unfortunately for mainstream press, no one was talking about IPIX… not yet anyway. Not even Wall Street knew what was happening to the volume of this $100 million stock.
But we did… thanks to blogs. And we bought IPIX at $7.80 a share.
Sure enough, news about the IPIX camera continued to generate blog buzz. And it wasn’t long before CNBC, Forbes and others grabbed the story and ran with it.
Suddenly, every one was buying IPIX… and the stock took off.
By April 12, 2004, right after the news showed up on MarketWatch, the stock soared to $27 a share… and we were right there to bank the gain from a $7.60 entry.
Make no mistake, blogs are powerful tools… they can and will continue to move stocks and speed the news dissemination process. Look for more on how to trade with blogs at SC Trading Pit.
Ian L. Cooper