Reblog: Price Discounts Everything – Even Results
There are lots of people who trade stocks based on news and financial results. And they get severely confused and even disappointed when stock price roars despite a bad result/bad news or worse, it falls despite a wonderful result/good news. Today’s article depicts how trading based on news and results is a hopeless, dangerous and a loser’s game.
In India, companies are required to report their quarterly earnings to its shareholders. So, in every three months’ time, we are faced with a plethora of companies coming out with their quarterly results. So, most traders buy if results are good and if results are disappointing, they sell. On the face of it, it appears completely logical but let me tell you, it is far from being logical.
Let me show you a recent real life scenario which defied the logic of buying on good results:
Mahanagar Gas Limited (MGL), announced it’s Q1 2017-18 results on 9th August 2017. The result was terrific yet the stock fell like there’s no tomorrow.
Here are the key highlights of the result: