My dumb trade of the day

I am bored as my financial accounting professor is talking about present value, and I saw ABK go up by 20% in minutes. I look around to see what happened and I find this article. Good news for the insured bond market, to be sure, but a 20% rise in ABK? Gleefully, I shorted ABK @ 10.30 with a target of 10, only to be forced to cover @ 10.90 (for a loss of 5.8%) as the stock rose to new highs. Little did I know that the reason for ABK's jump was actually this.

I think the most important lesson is that this demonstrates the value of information - don't trade until you feel like you know the stock and what is going on with it. An important lesson for me is to take advantage of the market to sell what I've bought at market lows - not to speculate on future negative price movements. A much better move would have been to buy ABK when it briefly dipped below 10, but hindsight is 20/20.