Well, I certainly do agree about the underlying assumption: that companies' reports are (one of) the best way(s) to understand what is happening inside a co (most importantly, to its financials). I think that almost all of us here can agree on that (and probably almost everyone else too.)
But as I think you know, I disagree about that being the best time to buy/sell (unless maybe if it's a really small co whose annuals no-one reads (i.e., e.g., if nothing has happened to stock price despite amazing/abysmal report).
My reasoning is the opposite: the contrarian's approach. When the news is good, sell. When the news is bad: buy.
(This is one of the several points on which you and I differ; and I think there is a pretty clear line here – probably that old "strict Graham"/"new Buffett" 'philosophical' disagreement – among us value investors more generally, not least on this board.)
Why? In your own words:
"There's nothing that gets buyers in the market more interested in buying a company's stock than when it reports an Increased Bottom Line profit" So that is the time to sell (when you have high demand driving up the price); hence you want to be in the stock before the news, having maybe bought during the sell-off after one of the poorer reports, when everything looked black as night. Because:
"needless to say, the converse occurs when profits are down" ...and that is, au contraire, the time to buy.
Best time to buy sandals is in autumn/winter, and best time to look for winter jacket is spring/summer.
Best time to buy anything is on sale.
(And of course, the reverse is true for selling.) |
