Earning estimate.. eps..
I wasn't always a good investor. Over the past 30 years I've made just about every mistake imaginable:
Jumped in at the peak
Jumped out too late
Bought falling knives
Doubled down on losers
You name it, I probably did it.
Learn this thing ie earning estimate
earnings estimate revisions [EER] are the most powerful force impacting stock prices
The 3 Top Reasons to Love Earnings Estimate Revisions
1) The Most Fundamentally Sound Metric:
At the end of the day, all stock price movements can be traced back to earnings.
Read that line again so it really sinks in. The reason it's true is from the basic fact that when you buy shares in a company, you are actually buying a percentage ownership stake in that firm. And if you are the owner of a company, big or small, then the single most important metric to gauge success is how much earnings are generated.
If profits go higher than expected, the share price will rise. Conversely if profits go lower than expected, the share price will come down as well. The stock market has always worked on this premise and it always will. And nothing captures the essence of this notion more than earnings estimate revisions.
2) Applies to Every Type of Investor: Because all stock price movements can be traced back to earnings, it follows that earnings should be at the heart of every investment decision. But that is not the same as saying that earnings are the ONLY thing to consider when selecting a stock. That is just the starting point. From there, each investor can layer on other concepts such as value, growth, charts etc. to find the stocks that fit their unique approach.
3) It WORKS!: When you put the philosophy and analogies aside, earnings estimate revisions simply work.
