Ignore Wall Street's Chatter: Here's Why You Need to Read Earnings Reports!

Get context from the earnings reports from articles, but drill down to the nitty-gritty of the reports to get the full picture.

Apr 25, 2014 at 11:15AM

I know, I know. Looking through SEC reports isn't always fun. Honestly, it's part of my job and sometimes I have a hard time getting through them as well. But here's why it's important. Take a look at the following tweets and see if you can get a feel for how these companies performed in the most recent quarter:

Here's how Microsoft (NASDAQ:MSFT) did over the past three months. It's Satya Nadella's first quarterly earnings call as CEO, so this is important.

Great! The company beat estimates, shares are up. Way to go, Nadella! But, then there's this:

Come on, Nadella, get it together!

OK, well, maybe Microsoft's earnings were a little confusing. Let's see how Amazon.com (NASDAQ:AMZN)did:

Well, that sounds kinda negative. How about another article from another source:

Hmm, that sounds much better.

But how do we figure out what's really going on?

The Foolish approach
To be sure, we can read the full articles and not just the headlines. But even when we do that, it's likely each article writer is using the same information and taking a new angle to make different points. And that's OK. The Motley Fool encourages its writers to do the same.

But as good as having someone recap the information can be, it may not paint the full picture. That's where going straight to the earnings report comes in. Reading one or two articles is helpful in adding context to the earnings numbers, but diving into the filings yourself will provide a fuller picture and make you a much better investor. 

Why? Because you'll be able to see the the quarterly numbers for yourself, and see what's changed sequentially and what's going on year over year. That'll give you a better long-term perspective on your stock instead of all the doom-and-gloom or unrealistic euphoria that sometimes surrounds earnings articles.

If you're new to investing, check out this Fool article on the right place to start investing now or our check out our 13 Steps to Investing Foolishly. If you'e a seasoned investor who needs to dig into earnings reports a little more, check out the SEC's EDGAR website and search for official earnings reports. Or you can type the ticker symbol on our website search box and then click the SEC filings tab. 

But no matter how you get the quarterly earnings information, make sure you're reading the official filings for yourself. It takes a little more patience than reading articles, but you'll get a better long-term perspective on how a company's doing, and you'll likely learn a little something in the process.

Oh, and here's The Motley Fool's top stock for 2014
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Fool contributor Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Amazon.com. It also owns shares of Microsoft and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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