Just like nature, Wall Street has its own cycle of seasons, and with the calendar now in October, companies are gearing up to report their next round of earnings. Given that earnings can dramatically influence a stock's price (over both the short and long term), it is clearly an important part of every investor's schedule. With that in mind, here are a few points to consider as the markets gear up for the next earnings cycle. (For more, check out Strategies For Quarterly Earnings Season.)
1. It's All Relative … to Expectations
Earnings season is when individual investors get a reminder of just how thoroughly the short-termism of Wall Street has infiltrated the markets. A company can report a devastatingly bad quarter and professional investors will cheer so long as it was 2 cents less devastating than commonly expected. Likewise, a company can report a spotless quarter and excellent growth, but coming in a penny or two shy of the published number - or, even worse, the dreaded '"whisper number'" - and tumble.
For the full column, please go to:
http://financialedge.investopedia.com/financial-edge/1010/4-Things-To-Know-About-Earnings-Season.aspx
No comments:
Post a Comment