Follow the Quarterly Result Investing Herd at Your Own Risk - Chart Of The Day 30 May 2018 - Equitymaster

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Follow the Quarterly Result Investing Herd at Your Own Risk
May 30, 2018

If the change in quarterly earnings is a misnomer, what should investors look at?

Well, the annual earnings are a better and more normalized picture of the company's performance.

But the market is certainly myopic. There is typically a big contrast between annual earnings performance of companies and the extent to which they find favour amongst investors.

Stocks that were beaten down over several quarters did brilliantly after declaring their March 2018 quarter numbers. Even if their 12-month earnings performance was a disappointment. Beware of following such herds.

Data Source: Ace Equity
*Change in Stock price announcement of FY18 results.

This Chart Of The Day was published in The 5 Minute WrapUp - The Earnings Turnaround is Slow... and That's Good!

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