Earnings season is lots of fun, until you’re on the receiving end of a $FEYE or a $GPRO. Seeing these unbelievable blow ups happen on a regular basis really makes a strong argument for going 100% ETF, saying ‘fuck it’ in the process.
My chief issue with ETFs is that it lacks romanticism. There’s nothing like picking a stock that truly works and makes you a lot of money. While it’s true, any fiduciary worth his salt will tell you that the main goal is to achieve incremental returns over a long period of time, allowing said gains to compound and build wealth over time. I get all that.
But I’m the sort of guy who speed chops carrots while my balls are placed atop the counter. I drive a car made from dynamite sticks and steer it towards the sun.
I’d be lying to myself if I said I was going to trade conservatively because MUH risk. Fuck risk and fuck earnings too.
If you’re trading, you’re better off selling your stock ahead of earnings and just playing the options market. That way, you have defined risk. In other words, if you had $10k in $AMZN heading into earnings and worried that it might drop 10%, why not either hedge it with puts or simply stake your bias on $1k worth of options and liquidate the stock ahead of the announcement?
Shit, with the major moves in these earnings plays, like $FEYE, $FTNT, $GPRO, $HBI, $DATA, $GIMO, $ELY and $ATHN, you’d be crazy not to play a little earnings lotto with a small fund allocated to the options market.
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Great post good Dr. Touches on various topics. Related to ETFs, if one is bullish in an industry but may not be the best stock picker, ETFs are one’s best choice. I like to hold a few ETFs and then a sparse amount of individual stocks for a little alpha (no beta). As to your point about options and earnings, totally agree if you have no long term position in the stock.
oh wow. My earnings gambles were tossed in a furnace and shitted on.
GIMO calls & FEYE calls were not the move lmfao.
Things like this are why I stick to futures.
Just don’t be like me and forget to write UA earnings on the calendar. Unless of course you wish your balls julienned, with a side of clown rape while you’re sleeping.
Do we really need that imagery on such a lovely Friday?
Buy those that can give good guidance.
Taxes are the reason you wouldn’t sell stock before every earnings announcement. People ignoring taxes are definitely playing a losers game.