CNBC’s Jim Cramer reminded investors Thursday to carefully process earnings and other company news before deciding to buy or sell a stock.
“Why can’t we just take the income at face value and decide immediately whether something is good or bad? Because it takes time to evaluate new information,” said the host of “Mad Money”. “As with anything else, when you pass judgment in the stock market, you will make mistakes. Therefore, you cannot rely on the first blush to see how a company is doing.”
Cramer cited Wednesday’s Snowflake earnings report as an example. The data analytics software company’s stocks fell as much as 8% in expanded trading before reducing those losses.
“If you had bothered to listen to CEO Frank Slootman on last night’s show, you would have been a buyer, not a seller, because it was a brilliant quarter,” said Cramer, noting that Snowflake shares closed Thursday thereafter increased by more than 4%, session start lower.
“The second flush,” said Cramer, turned out to be “much more accurate”.
Beyond Meat’s stock movement, Thursday also shows the need for careful scrutiny before making any investment decision, Cramer said. The plant-based meat manufacturer’s shares fell 12.5%, trading at $ 142.61 per share.
“At first glance, you might think that Beyond Meat is preparing for a big quarter thanks to its contracts with McDonald’s and China KFC,” said Cramer.
However, there is more to the stock movement than just these positive business developments, he said. According to Cramer, Reddit’s WallStreetBets forum – known for influencing meme stocks like GameStop – appears to have a role to play.
“They’re just trying to break the shorts here because 25% of the float is short. The action doesn’t say anything about the basics, although I predict … more pain for the shorts,” Cramer said.
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