When the stock market makes no sense!

Earnings calls are still in full swing. Companies release the results of their work in past three months, analysts compare them to their expectations, some Q&A takes place between the management of the companies and the financial analysts, and investors go wild accordingly. For long-term intelligent investors, it's more fun to observe the circus rather than to participate. Here are three counter-intuitive reactions of the market to the news:

Disney is on fire, investors are unimpressed. 
Disney is no joke. It's a monster. One hit after another, Disney studios put blockbuster movies out and generate cash for the company. Soon and with the release of its subscription-based sports channel, the company will most likely get immortalized and cover up its Achilles' heel of ESPN. But, the stock market is not yet seeing it that way. Despite another great quarterly performance yet again, shares of Disney haven't budged. One can argue no other successful company can be bought at such an affordable price.

TripAdvisor did less bad than what was expected and got a 20% stock price jump!
Imagine you take a test at school and the teacher was expecting you to get an F. Instead, you got lucky and got the answers to two questions correct. Your teacher gets very impressed and adds your name as a candidate for the school valedictorian. Sounds absurd? Well, that's what happened with TripAdvisor this week. The company's sales grew 2% this quarter, while the analysts expected 3% decline, and tadaaaa, we have 20% jump in the stock price in one day!

Walmart won over Amazon in India, but the stock fell.
Everyone were unimpressed by Walmart taking the lead in India's ecommerce market and purchasing a majority stake in Flipkart - India's #1 ecommerce player. The share price of the company fell as the news broke. Walmart is, rightfully so, focusing on getting ahead of Amazon in a market where this kind of ecommerce hasn't yet got a strong foothold. Counterintuitively, the stock market punished Walmart for its victory. I bet you, had Amazon won the bid, shares of Walmart would have fallen again. Poor Walmart!

Let's wrap it up for today by celebrating the mothers' day! This week on our Intelligent Stock Market Investors Facebook Group we had an interesting conversation about picking up a stock as a mothers' day gift! Join the conversation and spread the joy by inviting your friends to our community. Forward this email to a friend or two.

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