There’s a reason why the average/amateur investor should stay away from trying to play earnings report. If you’ve been watching this season so far, you’re probably scratching your head wondering what the heck is going on.
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Today alone, there were several companies that reported. Quite a few of them beat the estimates that the street was expected, but a good portion of those stocks went backwards. Out of the ones that missed the estimates, some went up in value. Go figure.
I’ve played the report game in the past and half the time the reports didn’t stand up to the estimates. I have noticed that I’ve done better during a bull market than a bear(market). Last summer was very successful for me when the market was on a tear.
There are too many variables in an earnings report. The company can beat the estimate for that quarter, but their guidance may not be what was expected. Look what happened with Apple. Their profits jumped 31%, but the stock dropped 11% in after market trading. They did come back today to finish down 3% from yesterday’s close.
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My advice is to stay out of the game if you haven’t done your due diligence. When you do the research on a company and see that the fundamental are strong, you should be investing in that stock well before then. Yes, this site is titled “Beating The Stock Market”, but to do that you can’t take chances gambling.
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