Investing at the speed of thought

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Jason’s Random Words

With a few of the big banks having reported quarterly results on Friday, we are now in earnings season.

There are a lot of ways to get earnings information. Websites like Earnings Whispers are useful to find out when companies are reporting, and there is no lack of outlets and blogs and newsletters that will give you their take on the results of hundreds of the most popular companies. 

And I’ll probably read the takes from a lot of those in the next six weeks. I’ll also write my own takes, too. But for the companies I follow the closest, I always rely on the company’s SEC filings as the primary source of information I use to inform my own opinions and decisions. 

Here’s why, and how I think about the cadence of all of the outlets that produce earnings content. 

To start, the first coverage is just a race to be first for the most popular companies. Content producers prioritize speed over everything. Regurgitating the company press release as quickly as possible. Your eyeballs drive their ad revenue, or they want to keep you in their ecosystem, so getting their take published fast is the goal. Deeper insights can come later. 

That very fact should tell you all you need to know about the value of those quick takes. They won’t be deep or insightful, just fast. They also may miss the things that matter the most. You simply cannot be a good stock picker if this is your primary source of information. 

Next, you’ll see the deeper takes or the articles (and increasingly video content) that may get a little deeper or focus on things the quick takes missed. Chances are, the producer of that content did their research from a company’s filings. These start getting more into what really matters when it’s time to decide whether to buy or maybe move on from an investment.

You may also see analyst reports or ratings changes after earnings. Their work also comes from reading the filings (and talking to management during and after the earnings call). 

Maybe you see the pattern. The most valuable insights come from a company’s filings. Not the earnings press release and certainly not anyone’s regurgitation of it (even mine).

Next. Let’s talk cadence. I rarely read earnings coverage or filings soon after it comes out. In my experience there’s absolutely no value or edge in reading it the day it is released. The traders who can leverage speed to make profit have already acted before you will open the filing. Don’t waste your time trying to be faster than the market. 

Our edge is in knowing our goals and timelines, and being able to act ahead of those goals, not other investors or traders. And maximizing those advantages happens at the speed of deep thought, not quick thought. Making fewer, more thought-out decisions and fewer reactions trying to avoid losses and chase big winners will always work better for us small fish. 

You can do it,

Jason