Rev Shark: "The Earnings Gamble"
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Re: Rev Shark: "The Earnings Gamble"
Muito bom o artigo, Ulisses. Destaco duas passagens:
Ulisses Pereira Escreveu:
"Sometimes there are psychological themes that do make betting on earnings a little less risky. We saw this last quarter, where virtually every company with a reasonable report traded up. It didn't matter if revenues were weak -- as long as EPS was close, the market was in a buying mood on the news.
That was a very unusual environment and I doubt we see that again. This quarter the risks of betting on earnings will likely return. If you enjoy betting on coin flips or playing slot machines, then buying in front of earnings is a good way to go. Just be aware that there is a large element of luck.
If you are more risk-averse, consider buying after a company reports. Companies with truly exceptional earnings will offer many opportunities to buy after the reports are issued. Yes, you may end up paying more but you will also substantially reduce risk. "
(in www.realmoney.com)
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Rev Shark: "The Earnings Gamble"
"The Earnings Gamble"
By Rev Shark
RealMoney.com Contributor
10/13/2009 12:37 PM EDT
"For many market participants, earnings season is a very helpful insight into fundamentals, but for another group it is next best thing to a slot machine. There are always opportunities to speculate in the market, but earnings provide a chance to do some real gambling if you are so inclined. But make no mistake about it -- earnings are a gamble.
Many folks like to think they have some special insight into how a stock will perform following its report, but they are often fooling themselves. In most cases it a coin flip -- you are likely to be right often enough to let you think you have some great insight, when really all that is happening is that you are lucky.
Thousands of investors are looking for an edge in front of earnings reports. These folks have to be right not only about whether a company beats the publically issued estimates, but whether it also beats the unpublished expectations. The more people who believe a company will beat its estimates, the more likely a stock will trade up in front of the news and price in those high expectations.
Sometimes there are psychological themes that do make betting on earnings a little less risky. We saw this last quarter, where virtually every company with a reasonable report traded up. It didn't matter if revenues were weak -- as long as EPS was close, the market was in a buying mood on the news.
That was a very unusual environment and I doubt we see that again. This quarter the risks of betting on earnings will likely return. If you enjoy betting on coin flips or playing slot machines, then buying in front of earnings is a good way to go. Just be aware that there is a large element of luck.
If you are more risk-averse, consider buying after a company reports. Companies with truly exceptional earnings will offer many opportunities to buy after the reports are issued. Yes, you may end up paying more but you will also substantially reduce risk.
One way or the other, earnings season offers opportunity. It is just a matter if you prefer the adrenalin rush of betting in front of the numbers or the stealth of looking for good entries after the numbers. "
(in www.realmoney.com)
By Rev Shark
RealMoney.com Contributor
10/13/2009 12:37 PM EDT
"For many market participants, earnings season is a very helpful insight into fundamentals, but for another group it is next best thing to a slot machine. There are always opportunities to speculate in the market, but earnings provide a chance to do some real gambling if you are so inclined. But make no mistake about it -- earnings are a gamble.
Many folks like to think they have some special insight into how a stock will perform following its report, but they are often fooling themselves. In most cases it a coin flip -- you are likely to be right often enough to let you think you have some great insight, when really all that is happening is that you are lucky.
Thousands of investors are looking for an edge in front of earnings reports. These folks have to be right not only about whether a company beats the publically issued estimates, but whether it also beats the unpublished expectations. The more people who believe a company will beat its estimates, the more likely a stock will trade up in front of the news and price in those high expectations.
Sometimes there are psychological themes that do make betting on earnings a little less risky. We saw this last quarter, where virtually every company with a reasonable report traded up. It didn't matter if revenues were weak -- as long as EPS was close, the market was in a buying mood on the news.
That was a very unusual environment and I doubt we see that again. This quarter the risks of betting on earnings will likely return. If you enjoy betting on coin flips or playing slot machines, then buying in front of earnings is a good way to go. Just be aware that there is a large element of luck.
If you are more risk-averse, consider buying after a company reports. Companies with truly exceptional earnings will offer many opportunities to buy after the reports are issued. Yes, you may end up paying more but you will also substantially reduce risk.
One way or the other, earnings season offers opportunity. It is just a matter if you prefer the adrenalin rush of betting in front of the numbers or the stealth of looking for good entries after the numbers. "
(in www.realmoney.com)
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