> How many times have we seen a company out-perform expectations and then the stock plummet, or a company under-perform and rally?
Far, far, far less than a company's stock surging after a good quarterly, a great product launch or tanking after a bad earnings report. You are nitpicking.
Yes, outliers and "irrational" market reactions exist, but there is an obvious arbitrage opportunity in deriving accurate sales numbers or other indices before the market gets its hand on them.
It is uncommon for a company to outperform expectations and plummet but very common for it to simply not react or dip slightly. Thus making it hard to make any serious money if you can predict outperformance
However it is more common for a stock to tank if it misses expectations. If you can predict underperformance, you can make some serious bank.
Far, far, far less than a company's stock surging after a good quarterly, a great product launch or tanking after a bad earnings report. You are nitpicking.
Yes, outliers and "irrational" market reactions exist, but there is an obvious arbitrage opportunity in deriving accurate sales numbers or other indices before the market gets its hand on them.