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It's earnings season again, so please pay attention.
First off, here's the deal. In general terms a stock will run
higher, up "into" an earnings release.
Then, unless it's just absolutely stellar it usually sells off. They
call it buy the rumor and sell
the news. We don't care what you call it, but when a stock announces
good earnings and then
opens the next day down 8 bucks, we wouldn't like it and neither
would you.
The problem is, we really never know what company is going to be the
one that beats by just enough
margin to get the street all sorts of gaga and then it opens up 6
bucks instead of down. We wish we had a way to tell, but the fact is
we don't. So, the risk reward scenario of holding it over the
earnings release is tilted toward the risk side and we don't like to
do it. That's not to say we never have, and never will. We've been
caught many times in a stock where we forgot to check the earnings
release, or checked it, and the web site like earnings.com or Yahoo
had it wrong. Then of course sometimes the company itself will do a
last minute reporting date change so they can get their affairs in
order.
In this case, when we are talking about holding stocks during
earnings period. Don't rely on anyone to have it right. They might
have forgotten, they might have written it down wrong, who knows.
The bottom line is that for the most part we don't want to be in a
stock over the actual reporting of earnings and if we are it's
because we think something special is going to happen, we feel brave
that day or we screwed up. That's the only three choices.
So, as this earnings season gets in gear, please check Yahoo,
Briefing, Bloomberg, MSNBC,
anyone you can think of to get the appropriate earnings release and
try and be "out of that stock"
the day before a morning's release, or the afternoon of an after the
bell release. Sure there will be some that you will sell only to see
the stock soar higher. But that won't hurt nearly as bad as
being in the one that gaps down 10 bucks and never recovers. It's
that serious. Double check.
P.S. Now if you or somebody you know needs fast financing, a good
source to get 1st/2nd mortgages, refi's, home equity or bill
consolidation can be found at the following site. Just look on the
left and click on "application" to fill out a short form. The
company has a lending pool of 300 funders.
http://www.kimlarinc.mortgagewayz.com
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