Ken Fisher Shares His Thoughts on an Underappreciated Positive: Corporate Earnings

Title screen appears, “Ken Fisher Shares His Thoughts on an Underappreciated Positive: Corporate Earnings”

A man appears on the screen wearing a navy suit, sitting in a office in front of a fireplace.

He begins to speak.

A banner identifies him as Ken Fisher, Executive Chairmen and Co-Chief Investment Officer, Fisher Investments.

Ken Fisher: So, I usually don't have many thoughts on earning season, but people often ask, what are your thoughts on earning season? The reason that I don't usually is because for the most part, overall, markets are pre-pricers and they tend to pre-price earnings season perfectly So, no, markets aren't perfect, but generally so yes. So, for example, markets tend to have a pretty good sense of prepricing, how the economy is doing, that's what they do for a living, what parts are stronger, what parts are weaker.

Ken Fisher: And so, the companies that fit into those categories neatly and have earnings consistent with that tend to have been priced before you ever get to earning season. There are individual instances, of course, where companies are individually above or below what was expected of them by a lot and there can be surprises there, but they're less than what people normally think them to be. And that's particularly true this year whereas the market has behaved in a more downward than upward mode, the companies in categories have been getting hammered that actually are consistent with the overall behavior of the market. But it's easy to get that confused with the actual earnings announcements of the company and how they behave.

Ken Fisher: I actually believe in this period that the amount of earnings announcement effect is much less than people think it is. The way humans are, we tend to want to focus over and over and over on the things we expect. So, we expect earnings should be terribly important as they're announced. Again, I revert to my point that mostly markets pre price most of it, and there's only individual companies doing markedly better or markedly worse that diverge markedly from the categories that they're in. Mostly they trade like the categories that they're in.

Ken Fisher: So, my point to you is that how their categories will do moving forward is going to be more important mostly than the individual stock variation. Thank you for listening to me.

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