if a stock closed up and reported quarterly earnings down but with a share gain how should I take it?

Answer 1

never under estimate the ignorance of other investors?

Answer 2

I always give more weight to the earnings since they indicate if the company is actually earning more money or less, and so the value of the stock should go in the same direction.

Short-term price movements are the indication of people's emotions, and you have to be careful about them, they are not a reliable way of knowing where a stock is really heading. In fact short term direction can actually be misleading.

If you don't already own the stock, I would not buy it unless the earning growth is positive (and there are lots of companies in that situation). Why take the risk of buying that company if you don't have to.

If you hold the stock, I would wait to see if the up movement continues - don't sell on the upswing until the momentum is shifting. If you bought it previously, you had reason to think it would rise, so give it a chance. However, don't hang onto it if the trend becomes negative and the price falls below a previous support level.

Answer 3

You have to read the information available to you. Perhaps they reported earnings that were down... but not as far down as the "street" expected. There could be many reasons.

How should you take it? Either the stock is;
At the right price.
Is over priced.
Is going up.

Never invest in any stock without;
Understanding it.
Have an exit strategy (both for the upside as well as the downside)

Good luck.