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. 

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