Here's an alternative view on earnings. Quite a while ago I would trade options, specifically around the time that earnings came out on a company. I would buy either puts or calls based on the scuttlebutt surrounding the report coming out. What I quickly noticed is that even if earnings were amazing, a couple of times even blowout quarters, the stock would sometimes still tank afterward. Likewise even if earnings were trash, or worse than expected sometimes the PPS still increased afterward. I quickly began to buy straddle plays on the more volatile companies and sure enough that started paying off. The lesson: Even if earnings are amazing, and this thing is undervalued by eleventy billion percent, that doesn't necessarily mean that great earnings will = increase in share price.
"Weak, Dow's only down ~2.5%. I was hoping for live, serious destruction. This is like Godzilla coming on shore, taking a sh** in the municipal pool, & heading back out to sea." -Gigantopithecus
