Jumping the Gun

 | Feb 02, 2012 | 10:59 AM EST  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

erts

,

clb

We are seeing too much shooting first and asking questions later. Take last night. We got reports from two companies in two very different industries: Electronic Arts (ERTS) and Core Labs (CLB). Both reported excellent quarters but both guided lighter than expected.

Both immediately traded down, Core Labs to $106 from $107 and Electronic Arts down to $16 from $17.

But, in classic "upon further review," we discovered that both companies are doing so much right and have so much in the pipe that they were huge buys. Core Labs made it clear on my show that it has almost no exposure to natural gas and most of its business is deep-water drill. EA revealed a great pipe of products and has strong momentum from some of its games, including Star Wars.

The headlines just didn't tell the story.

I know that things will never change. As long as there is before- and after-market trading people will continue to try to be first and get the big trades off with the expectation that the headlines are right.

Sometimes they are.

But think of it this way. Core Labs and Electronic Arts are two of the biggest gainers on the S&P today. If you sold, you could not have been more wrong if you tried.

My suggestion is to recall these two next time you decide to bang out bids on a headline. Had you been there on the receiving side you would already be starting out your month with some very healthy gains.

_______


More from Jim Cramer:

Columnist Conversations

Ford is working on its third straight gain following two days of steep loses to start this week. At this...
Market is holding on for gains for now but think Doug Kass is right and could see some decent profit taking by...
I have a full blown article surrounding the U.S. Retail Sector coming out on soon, but for now let's just lo...
The dividend action is pretty quiet at the moment, but I wanted to point out for those generating income with ...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.