I wish I had a best friend named Billy that worked at Apple.
I'd call him up and discreetly ask him in hushed tones:
"Yo Billy, what's going on with Apple's earnings?"
He'd hang up on me because everybody knows Apple taps employee phones. So I drive over to his house, we turn the speakers on full blast just like in any good conspiracy movie and he says:
"It's going to be big. I'm talking blow out earnings, huge iPhone 7 sales and increased guidance."
The stock is going to skyrocket, and I'm in the know just like the shady Wall Street CEOs.
I would load up with 10000 shares since this is a sure thing and I'd nail this one when the stock market opens tomorrow. In the meantime, I would head over to the Porsche dealership so I could spend my ill-gotten gains.
As Eminem would say, snap back to reality. Yes, Apple ($APPL) had blow out earnings yesterday, but . . .
At the open the stock is down four points off a "sell the good news" event. Dream scenario? Armed with insider information I would be down $40,000 right now.
Even with a crystal earnings ball you still could not have predicted this move. This is exactly why I rarely trade pre-earnings. Instead, I use a 7-setup post earnings-breakout strategy that allows me to play probabilities and patterns rather than gambling.
Today's lesson is to dream big, but trade smart, and never gamble on earnings.
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