it's the basis of stocks

when people look to invest, the main goal is to earn profit. no one wants to invest in a company which is experiencing losses. the simplest way to understand what the company's profit/loss is would be to look at its financial report, ie. the earnings. when earnings is bullish, the stocks generally rise in price. when earnings are bearish, the stocks typically dip in price. however, not all stocks follow this rule. there are some stocks which historically did not rise when the earnings of the company rose. in these cases, it is likely because of the consumer's and market's attitude towards the stock. perhaps they feel that the stock is not worth its market value (overvalued). it goes to show that one should know your stock before purchasing. know which is speculative which is fundamental.