Companies beat analyst expectations. This happens every quarter. The headline treats it like a revelation.
Analysts lowball their numbers. Companies know this. They guide down. Analysts revise down. Then the company beats by a penny and some dipsh*t on CNBC acts like Tim Cook just cured cancer with an iPhone.
The real scam is the phrase "track record of beating expectations." Track record. Like these firms discovered a proprietary method for adding numbers good. They didn't. They just played the same game everyone plays. Sandbagging works until it doesn't, and when it doesn't, the stock drops forty percent and your Robinhood account makes a sound like a dial-up modem dying.
Retail traders see this headline and think they've cracked the code. Buy the historically good boys. Wait for earnings. Watch line go up. Finally, a system. Finally, an edge. They don't ask why, if this pattern is so reliable, it's being published in a free newsletter instead of being kept secret by a hedge fund that doesn't return phone calls.
The article doesn't name the stocks. Just says they exist. Next week. History of beating. Shares rise. It's financial astrology without the specificity of mercury being in retrograde.
Here's what happens next week. Three of the stocks beat and go down because guidance was soft. Two miss and go up because the miss was priced in. One beats, raises guidance, and still drops because Jerome from Goldman had a bad croissant that morning and downgraded out of spite.
And some guy named Derek will post his loss porn on Reddit with the caption "I don't understand, they beat expectations" while his wife schedules a consultation with a divorce attorney who also beats expectations by billing her faster than projected.
Photo by Oren Elbaz on Unsplash
Leave a Comment