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What Netflix’s Earnings Crash Can Teach Us

by | Apr 22, 2022 | Stocks

I know you’ve all read the headlines that shares of Netflix got crushed by earnings this week… I mean, it was kind of hard to miss when it tumbled 35% on Wednesday. 

It’s the biggest drop Netflix Inc. (Nasdaq: NFLX) has seen since 2004! Now the company’s share price is back where it was in early 2018…

Stock chart of Netflix (why earnings reports are important)

Netflix said it lost 200,000 subscribers in the first three months of the year, when analysts expected it to add 2.5 million. Even though the streaming service still has 221.64 million subscribers, the company also projected more losses next quarter…

But the point of this video isn’t to talk about Netflix. It’s to show you why earnings reports are important and how they impact the price of stocks…  

Why Earnings Reports Are ALWAYS Important to Watch 

Playing close attention to earning reports like Netflix is important because things like this happen… 

For the most part, individual stocks tend to be random. 

That means the typical day-to-day trading action we see is caused by the underlying sector… which is in turn affected by the broader market… then the bond market… then the currency market… and so on and so forth. 

So by the time things trickle down to individual stocks, there’s just not that much data. 

What I’m trying to explain is real data doesn’t come out of stocks that often — other than during quarterly earnings reports. 

Instead, stock prices trade based on changes in market sentiment. This is why the average annual return on stocks is closer to 6% versus the 30% you’d see on something like the Japanese yen or cryptocurrencies. 

But now you’re probably wondering how traders can gauge earnings reports to avoid landmines like Netflix… 

Well, I’ll show you in the video above… 

Check out the short video at the top of this page to learn why earning reports are important, how to gauge them correctly, how to figure out what the market’s expectations are and whether you should trade them or not. 

Don’t forget to like and subscribe to our YouTube channel if you haven’t already so you can be notified as soon as we post our next video, and see what other trade opportunities we’re paying close attention to! 

P.S. Hedge funds and institutions use algorithmic trading to give themselves an almost unfair advantage over the rest of the market…

Leaving everyday retail traders in the dust! 

But all hope is not lost because I’ve found a way to gain the upper hand against these Wall Street algos. 

I’ve coded an algorithm designed to capitalize in any market climate by isolating what I like to call “Super Stocks.” 

And if we play our cards right, we could even turn the tables against them!

Let me help. 

WRITTEN BY<br>Roger Scott

Roger Scott

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