Earnings Surprises... How to Invest

**SPEAKER_1** (0:01)
Welcome to the Money Tree Investing Podcast. Stock market, wealth, personal finance, value stocks. Invest in your life.

**Kirk Chisholm** (0:11)
Hello, Smart Money Tree Podcast listeners. Welcome to this week's show. My name is Kirk Chisholm. I'll be your host. So today, I'm joined by Doug Heagren. Hey, Doug.

**Douglas Heagren** (0:17)
Hey, Kirk. I'm excited to talk about today. The summer doldrums are starting to wear, and I think we finally got some fun things to chat about.

**Kirk Chisholm** (0:25)
Seriously, I'm not bored anymore, Doug. We've got enough to talk for at least another hour.

**Douglas Heagren** (0:31)
Thank goodness for that because we don't usually typically try to go longer. So good for us.

**Kirk Chisholm** (0:35)
Next week is a different week though. That's right. But this week was busy. So this week, we had a lot of stuff going on. We had the Federal Reserve FOMC targets, we had earnings, we had lots of stuff. We said this last week, but this is, in my opinion, the busiest and most important week of earnings season. I would say the second most important is probably the first week. We have all the banks reporting because they tend to give you an indication of what's going on in the economy. But this week, we had a whole host of companies report, Coca-Cola, UBS, Visa, Teradyne, Ford, ADP, Boston Scientific. Then you had the big tech companies, which are the more important ones. You had Microsoft and Meta on Wednesday, and then you had Amazon and Apple Thursday, which out of the Mag-70, you got half of them right there. Anyway, so what's important to take away from this is, there was a huge amount of earnings this week, huge amount of volatility, and I wanted to share something I've started to notice, and I only share this because I just find it weird.
When times are good, when the market is operating normally, what you would typically see is you'd see most things go up. Earnings come out, things go up, bad earnings, they don't go up as much, or maybe they're flat, maybe even down a little, but you don't see any really bad news. You don't really see that very often. But when things are a little different, when the markets are going sideways or the direction is a little hard to determine, you start to see this. This is two companies. I didn't label them, so I'm just going to say there's four companies here. There's Microsoft and Meta, and then there's Apple and Amazon. I believe this one is Microsoft and Meta. Yeah, I got the tickers in here. What we saw this week was Meta went down a reasonable amount, and then you had Microsoft, which went up a reasonable amount. Actually, Microsoft went up a lot, went up I think like 15, 16 percent after earnings, which is a lot for one of the biggest companies in the world. Meta did not look good, and then you had Apple and Amazon.
When you look at these, what do you see? You see two big tech companies basically canceling each other out.
I've seen this a lot more. When times are good, everything goes up, maybe it goes up a little bit. But when you have big ups and big downs, it ends up canceling each other out. This is one of these tinfoil hat topics. I don't really have any proof, but more of just a isn't that interesting comment. What we're seeing so far with earnings this week, you're seeing a lot of volatility. You saw the NASDAQ, which you talked about last week, was in the trading range and actually broke below the trading range. Then we had a story out yesterday about Citil cleaning out this young whippersnapper, Hedge Fund genius.
What was the name of his fund, Doug? I don't know if you remember this guy.

**Douglas Heagren** (3:23)
I forget the name of his fund. Yeah, the boy in the Citadel eat him up. Hold on, I'll look that up for you. Go ahead.

**Kirk Chisholm** (3:28)
It was something along the lines of intuitive perspectives or something like that. Doug will get it. But this young guy basically had a Hedge Fund, turned 200 million into like six billion in a short period of time, all by investing in basically AI.
This is all secondhand.

**Douglas Heagren** (3:45)
Kirk, it's Leopold Aschenbrenner's situational awareness fund. Which could not be more ironic.

**Kirk Chisholm** (3:51)
I actually sent out a few posts yesterday about the irony of this guy's name. Situational awareness.
This young guy's name, fund's name is situational awareness, which he got blown up because of his lack of situational awareness. So I'm explaining this for those of you who don't understand the irony. He turned 200 million into like four or six billion dollars in a short period of time by not only investing in AI but being like Forex leverage or some crazy number.