Playing the earnings game

During earnings season, I often have to ask myself whether I want to play the earnings game. There are times whereby earnings is good but the stock price crashed although it could also go up. Basically there is a 50% chance of either one happening and sometimes it can completely reverse the prevailing trend as well as the overall market sentiment to be one of the few bright sparks in the market.

There are times whereby I refrained myself and times where I go in with guns blazing. So far, I've had it both ways which means I'm neither a genius nor an idiot thus earnings day is an important consideration for me. Especially if today's the day to go in and tomorrow is earnings day. If it's a week later, it could be a maybe and if it's a month away, that's pretty far away so it's a go for me.

There was once a stock that I own which reported its earnings and somehow Google Finance didn't pick up the date so it was my mistake as I should have checked it through the exchange. That day was beautiful as I saw the stock blast through its downtrend and was up 7% by the time market closed. It was one of the few positive stocks that day in the entire market. 

For me, if earnings was good and yet the stock price crashed, I could either cut loss, hold on or add on regardless of whether there are dividends that would be paid. Of course, dividends would be a bonus but not the sole deciding factor. That would be an investment if the company fundamentals has passed my litmus test. I could also go on the offensive and short it so there are many choices I can make. 

Nowadays since I don't hold new stocks for investments, I become more selective and there are days I just paper trade and then check back to see whether I've become more accurate in my readings. Naturally, nothing can beat the sheer force of the market so at times I give it a couple of days to let it sit, much like wine before I can smell the bouquet. 

Comments

Post a Comment

Popular posts from this blog

A tale of two stocks

Once in a while say a year or two later, I will be very kaypoh and look at the past stocks that I’ve analysed before just to see how it’s doing. I may or may not have invested or traded in that stock but it just takes one second to click on the link and see the chart. I would have remembered it’s previous price so the current chart can either make me have 3 reactions. Oh chey, it’s the same or not much difference, Wow look at it go to heaven or Wah Kao this one die liao.  For the first reaction I usually just leave the stock be but for the other two reactions, I will go and take a look at my past analysis to see whether I’ve “predicted” it’s future. Two stocks caught my eye as one went to the sky and one straight to hell. Both were similar in the sense that they faced crises except that one managed to turnaround whereas the one in the depths of hell have a long way to go. Let’s start with the one in hell which is  Capita  which I did a sort of write up on in 2014. ...
Read more

Are you exchanging time for money?

Time is the most precious commodity on Earth. Or maybe it should be oxygen because without it we would just die! Assuming that our basic needs are met ensuring our survival, then time is more valuable than money although some may argue that money can be used to buy time. It's true in some situations and not in others. For example, money can help to relieve you of some mundane tasks so that you have more time to do things that you like. But money can't buy you time with your loved ones if their time is up. If you hate your job, you may feel like you are exchanging your time for money especially as you count down the minutes, days, weeks, months or even years to a new job or to a new endeavour that hopefully won't make you dread getting out of bed everyday. Sometimes I think we forget how precious time is and waste it like it is always there. In a way time is like oxygen, we breathe every second until we forget its very existence until it is taken away from us. The tim...
Read more

True or False: Guaranteed minimum of 40% returns

I had some difficulty thinking of what to write in this post and as I read the posts of other bloggers, I thought that I should share about my Chinese beautician who is an excellent source of stock market ideas and everything from China.  Basically we talk about stocks almost all the time since she invests in purely Chinese stocks. Currently ACCICB covers Chinese stocks so I've been thinking of starting my research and who knows I may pick up some stocks along the way. Back when we both didn't know that the other invests/trade, we already get along since we bitch to each other about work and I find her rather similar to me in terms of personality. I admire her candor among other characteristics and over the space of many years, we have become rather close. I do worry when she wants to return back for good and as she will be going home for a month, she told me that she knows of this scheme in China which seems like a deal too good to be true except that it's tru...
Read more