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Originally Posted by Valuist
I would say guidance is every bit as important, if not more, than earnings. We see countless companies exceed earnings, only to sell off as the post earnings call isn't 100% rosy.
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The market does seem to react more so to guidance than to actual operating results at times.
And because the market movers are not really investors but speculators, their action (reaction) to guidance often creates great buying opportunities.
Today is a case in point with two companies taking huge hits to their stock price primarily based on guidance, while the underlying business is still intact and growing.