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The Dance

October 10, 2012 – 5:50 pm

The first splatter of earnings were released with Alcoa leading the way with better than expected numbers. Costco also beat expectations as did Yum Brands. Cummings Engine disappointed. So goes the beginning of the quarterly dance of earnings season.

The experts have been guiding downward for several months so expectations are low. For instance Alcoa lost money and yet the stock rose this morning the day after they reported. The reason was because expectations were so very low thus the stock price was under pressure before the report and then with numbers that put aside the fears of the worst case scenario the stock popped up.

Understanding this quarterly dance with the manipulations of fear and greed by the experts who more often than not are wrong is part of managing money. Understanding the game and playing for the long term win, instead of the short term trade, is far more productive.

However, it is certainly entertaining to watch.

Good Trading
Steve Peasley

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