Why are quarter profits a bad indicator for stocks?
I would assume that when quarter profits increase, a stock price would increase but this is not always true. Why not?
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Answer by Kiker
You're right. But even when a company lists a record-breaking quarter, the market can still suck...taking that company down with it. The smaller the company, the less resilent it is to market forces....its all part of the violatility.
Take for example Taser: They had a booming quarter. Tons of international sales came in. They were sweeping through lawsuits. They posted 156% earnings, which, in a stable market would have meant a price explosion...but because of the financial sectors problems (subprime + credit cruch = Billions in write-downs) the entire market got tanked just off of a few poor earnings reports.
Its the nature of the beast, and it freaking sucks!!!!!!!
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