It's All About the Growth

If there is one thing to take away from earnings season, it is the fact the earnings day depends solely on outlooks. We see stocks rise and fall ahead of earnings expectations. When earnings actually come out, most stocks do not fluctuate as much as they used to. Earnings announcements are usually priced in at that point. The fluctuations come during the conference calls.

Conference calls are when you can truly gauge what a company has done and is planning to do. The best part of conference calls is when they give the outlook for the next quarter and the year. This is when a stock really starts to fluctuate and reflects what Wall Street thinks. At no point should you ever try and trade stocks ahead of earnings unless you are 100% sure of what is going to happen. A stock may trade up to earnings day and even trade up once they beat earnings by a penny. If that outlook is cloudy or poor, the stock will drop. If earnings are bad and the outlook is good, the stock will rise.

The game has changed at this point. We are looking for different factors to trade on now. To stay ahead of the game, we have to change with everyone else. The only way to make cash money is to stay ahead of the curve and trade intelligently. Use only the news you know and the news that will move the stock. Don't listen to the noise.