As some ET regulars have noticed, there are a growing number of members who have an profitable ability to make excellent guesses such as predicting a company's earnings before it's offically released. Anyone know where they are getting their information to make their gusses... is there a blog or some other information source who have trained or given these members the ability to guess a companies earnings? Having said that, I can see why some hedge funds can constantly beat the market these days. Maybe their high management fees are legitiment in order to pay the high salaries of these guessers.
Guessing before the earnings means you are betting against the consensus. The problem is that the consensus is just an average of all analysts, so a strategy is to use the estimates of the star analysts and hope something plays out on the suprise side. Other strats include looking at copetitors who have reported earlier and their earnings, looking for buying or selling interest going into the earnings. Just a couple things to look at
Folks in the know about how a company is doing play golf or otherwise are friends with folks in the know from other outfits. Scumsucker A from company A tells his buddies B, C and D that his internet company has been sucking air for a while, so B, C and D short and/or buy puts and/or sell calls. Actually, that's pretty lame, it's more likely they put on some complicated trades, but they all make money when company A reports they suck. Then Scumsucker B from company B tells the same group his outfit kicked butt, and the rest of the group rakes it in. Insider trading will always exist, it's just as hard to wipe out as the drug trade.
I suspect that part of this would be found from reading the right rumours sites. For example, there are a few particular tech rumour/news sites that offer deep an insightful articles on the current and future state of particular companies (examples such as ATI, Nvidia, Intel and AMD come to mind). Many stocks also have a great deal of seasonality associated with them. From the above list, I could point out that Nvidia tends to have a weak Q3. ATI has arguably been floundering since about Fall of 2004 (specifically ATI really, really goofed on assuming that users would be moving rapidly to PCI Express, when in fact AGP was still a very important part of the market), but royalties from the ATI GPU in the forthcoming Xbox 360 should provide a nice boost in the future. Going forwards, Intel had a pretty weak earnings report in early September 2004 that pretty much slumped the techs for about a week and a half last year. This time around I suspect that they will do the opposite, and report yet another strong quarter based on results fueled by the ever growing laptop market. If I'm familiar enough with techs to have a really good feel for the industry based on a few news/rumours sites alone, it's fair to say that others can do this with other sectors, not even counting insider leaks...
Work for Stevie Cohen, His shop gets the new releases before the general public. WHat these trading titans call "legal insider info."