This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Apprenticed Investor: Surviving Silly Season

Monday down. Tuesday up. Wednesday up, then down, then back up again -- big. Thursday, down over 0.5% for each of the major averages at midday.

Welcome to earnings season.

It may seem there is no rhyme or reason to how individual stocks respond to earnings reports. If you have been frustrated trying to make sense of it, you are in good company. Many traders have found gaming quarterly announcements to be a futile exercise. My own personal approach is that without some sort of an edge, I'd rather simply not play .

There are two keys to tracking earnings reports and the way a stock will trade afterward. The first is the expectations for the company's quarter. Not your expectations, rather the collective anticipation of analysts and fund managers for what the company will report and say during its conference call.

But playing the expectation game is only the first step. Once you determine how high the bar is set, you must then consider the stock's recent action. Some results are anticipated well in advance of the conference call. A quick look at a chart is often instructive.

We won't bother discussing a company like Kodak (EK), whose business has been eroding for a long time. The company simply missed its numbers. I'd rather look into why Citigroup (C - Get Report) disappointed. There are two explanations worth exploring; depending on which one you prefer, one makes these stocks a hold, the other a sell.

Some have blamed Citigroup's disappointment on the General Motors (GM - Get Report) blowup. If you believe that's the case, then Citi's problems are probably behind it, and you can hold it until October's report.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.24 -0.41%
C $44.23 -0.96%
GOOG $701.43 0.82%
GM $30.54 -0.16%
HPQ $11.45 -1.21%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs