Buy, Sell, or Wait During Earnings Season?

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Jason and Jeff
February 16, 2025

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Jeff’s Random Words

Hey guys, it’s me!

I was recently asked a question about buying stocks near the company’s earnings report. I was asked if I buy before earnings or after. This got me thinking about what I used to do and how my process has changed.

When I was a new stock investor, I was definitely a bit of a gambler when it came to earnings season. If I was interested in a stock and had vibes that it was going to go up after earnings, I would buy a little before the report. Conversely, if I was worried it might drop, I would wait.

This “process” taught me a valuable lesson. Even if I was right about the business’s results, I couldn’t predict what the market would do. I quickly stopped trying to get cute around earnings.

Because I have become someone who loves keeping track of the companies I own, I have developed a lot more patience. Once I get within a few weeks of earnings, I start to feel like the information I have is stale. I want to know the latest. How was revenue this last quarter? Profits? Cash generation? User growth? If I wait until earnings, I can get fresh data.

So if I had to answer the question I was asked, I would say I wait until after earnings. But that’s not true all the time. Sometimes I buy when I feel like the value is compelling, regardless of what might happen. I can be comfortable doing that because I am investing for decades and not months. 

The most true answer is that I tend not to buy much at all during earnings season. There’s too much information, too much data to sift through, too many earnings calls to listen to/read, etc.

There’s a lull in the cadence of earnings. It will come this time in mid-March. All the companies I own will have reported, the pace of companies reporting will slow to a trickle, and I will have time to really digest what the past few months have meant to the businesses I own.

That’s how I think about this right now. I’m sure this will change over time. I’m curious how you think about this question. Is waiting or not waiting a form of trying to time the market? Or is it a smart strategy? Let me know what you think.

Jeff

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