MMs - Trading Fundamentals vs Sentiment

Quick question for the pod shop people on here:

I've been in ER for just under a year and have had a bit of exposure to different investors/strategies. In calls with a lot of the pod shops it seems that they are typically very focused on  sentiment of other investors/ super near term outlook compared to other clients with even medium term outlooks.

I've read some of the stuff here about the modeling intensive work and "trading quarters" but I am curious about what the considerations are when making a trade based on earnings. How do you guys balance the potential for earnings surprise to the upside/downside versus the risk of "holding the bag" on a garbage company? 

Curious as sometimes I feel there are these big bets being placed on companies that are (*in my opinion) pretty lack luster with outlooks that are bleak even in the short term. 

The Social Network For Smart Money Investors

  • Commonstock built a platform to showcase the portfolios, real-time trades, and analysis of the smartest retail investors, helping you distinguish signal from noise. 
  • From equities and options to crypto and NFT's, markets are changing fast. It's more important than ever to find trustworthy information. 

Comments (1)

May 12, 2022 - 6:38pm
WSO Monkey Bot, what's your opinion? Comment below:

Repellat voluptate ea id minus. Itaque delectus quae aut libero. Qui aut ea praesentium rerum dolorum. Veniam ad voluptatibus impedit rerum delectus non maiores.

Dolores iusto voluptate vel saepe nam ut. Nisi commodi facere et sequi accusantium dolorem et. Est ratione odit est quia laboriosam dicta qui.

Quis consequatur et consequuntur exercitationem vel suscipit. Voluptas mollitia autem doloribus minima.

Start Discussion

Career Advancement Opportunities

June 2022 Investment Banking

  • Jefferies & Company (▲03) 99.6%
  • Lincoln International (= =) 99.2%
  • RBC Capital Markets (▲07) 98.8%
  • Bank of America Merrill Lynch (▲01) 98.4%
  • Houlihan Lokey (▲06) 98.0%

Overall Employee Satisfaction

June 2022 Investment Banking

  • Lincoln International (▲06) 99.6%
  • Jefferies & Company (▲11) 99.2%
  • Greenhill (▲07) 98.8%
  • Rothschild (▲01) 98.3%
  • Evercore (▽01) 97.9%

Professional Growth Opportunities

June 2022 Investment Banking

  • Jefferies & Company (▲04) 99.6%
  • Lincoln International (▲04) 99.2%
  • RBC Capital Markets (▲09) 98.8%
  • Houlihan Lokey (▲07) 98.4%
  • Bank of America Merrill Lynch (▲04) 98.0%

Total Avg Compensation

June 2022 Investment Banking

  • Director/MD (9) $661
  • Vice President (37) $394
  • Associates (189) $246
  • 2nd Year Analyst (115) $162
  • 3rd+ Year Analyst (17) $156
  • 1st Year Analyst (369) $150
  • Intern/Summer Associate (77) $148
  • Intern/Summer Analyst (290) $91