Many of us are familiar with the brilliant chapter in Bacon's Secrets of Professional Turf Betting about the changing cycles in a summer meeting in NY. The horses coming from the hot climates aren't accustomed to the NY tracks at first so they lose, then as they get accustomed they win, then they got tired and they lose. 3 cycles at least in one meeting.

I wonder if there are similar cycles in the earnings announcements. Invariably 75% of the companies beat their estimates. At first the banks, and big companies with very rigorous accounting like google and Microsoft report. Next the drug companies and industrials report. Finally a morass of companies that can't get their quarterlies together in 30 days take the stage. For each there is a different % of beats, and a different reaction for the individual company and the market itself. Also to be mentioned are the companies that are late in reporting. They are usually fighting with their auditors and bad results can be expected. Also, the days the market itself opens way down or up on reports like Apple, Google or Amazon as if these companies were the whole market and the market itself wasn't going to do its thing regardless and reverse the absurd reaction where it goes down or up 7 points on a single earnings. The whole subject is endlessly fascinating and is worthy of a Baconian study.


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