Decades ago the inside accountants at Royal Dutch Shell would play a game, Ahead of each earnings announcement, those privy to the numbers would make friendly bets on which direction the news would take the company’s shares. In possession of the same inside information, those most familiar with Shell’s health invariably had different opinions about how the markets would react. The players of the game were more often than not wrong.
It’s a reminder that predicting the future is difficult, even when predictions are made with information others lack. As human beings we tend to see things differently, including company earnings. It’s no easy feat to trade on inside information despite what you’re told.
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