It is said that history repeats, but it doesn’t sometimes.
For an instance, when you predict the earning per share (EPS) of the stocks looking at the positive response history, you might get hurt. That stock might miss the expected EPS even though it has beaten on the past four earnings (in most of the cases). Contrary, it might show the positive response in spite of the negative history.
We are being fooled everyday if we try to predict the upcoming earnings per share (EPS) looking at the past EPS alone.
So, then what should we consider?
There are still lots of things to learn when we watch the market everyday very closely because history doesn’t repeat sometimes. Our each leanings should be used as our new principles to break the odds in our way.
It is most important to look at the company’s expenses and news in the earning period. The company might have lots of expenses on some future grand projects or innovations resulting the low EPS. They might have low revenue even though they have beaten the expected EPS, which results big swing in stock market.