The Earnings Rule

 Whether earnings go up, down or sideways, in the long-run prices will follow. Over a short period of time price movement based on emotion may deviate. However, inevitably price will move to earnings.

Therefore, it’s much more important and, interestingly, easier to forecast earnings than it is price. However, most people take their cue from price movement.

Today’s video looks at price following earnings over various scenarios.
Best when viewed in full youtube screen.

Disclosure: Author Manages Portfolios Long PEP

The importance of earnings is undeniable. Short-term volatility is undeniable as well. However, volatility is much less important than business results in the long run. Smart investors know this, just ask Warren Buffett or Peter Lynch.

The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.