Ways to improve your risk resistance capacity

Moomoo Learn joined discussion · Feb 23, 2022 18:52

According to FactSet financial data, as of Feb 18, 77% of the companies that announced their results reported an EPS surprise.

The blended earnings growth rate is 30.9%. Companies in the Info-Tech sector went above estimates by the most, and the Consumer Disc sector had the most surprising increase in earnings.

However, some investors may feel that their stock holdings or assets are still shrinking.

Ways to improve your risk resistance capacity

Do earnings beats/misses matter?

Generally speaking, an earnings report is a short-term stock price catalyst. Beating the expectation could lead to stock rising in most cases because it's a sign of strong operating performance.

However, it's important to note that stock price fluctuations can be influenced by various factors, many of which go beyond earnings reports.

An earnings beat doesn’t always mean shares will rise, just as a miss doesn’t always imply shares will fall. Sometimes, other information released alongside earnings could result in a stock moving in an unexpected direction, especially when the broader market was under pressure amid the Fed rate hikes and geopolitical conflicts.

$Virgin Galactic (SPCE.US)$ has reported its fourth-quarter earnings on Tuesday after the bell.

Virgin Galactic (SPCE) said it lost $81 million, or 31 cents a share, in the fourth quarter, compared with a loss of $104 million, or 44 cents a share, in the year-ago quarter. Revenue hit $141,000 from no gains a year ago.

Analysts polled by FactSet expected the company to report a loss of 35 cents a share on sales of $300,000.

It has missed the revenue expectation but narrowed the loss. The stock price was slightly up after it closed near 7% lower in the trading session.

Selecting a good stock with fair prices is never easy. That's why we need to do financial analysis and find clues of the company's operations.

Direct access to How to reading earnings on moomoo.

We are in a ever-changing and unpredicatable market. Chasing profit is less necessary than managing and controlling risk.

How to improve your risk resistance capacity?

1. Prepare emergency fund. Cash may lose value, but won't be lost.

2. Develop your skills. Skills will never be a burden.

3. Diversify your income sources. Taking on part-time work could be a good idea.

4. Learn to invest. It's a choice for self-motivated learners. But you should first assess your risk tolerance and establish clear trading strategies.

What are your strategies to improve risk resistance capacity?

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