| Quarterly Results - Say Hello! |
After following the Dollar movements, watching Federal Reserve Bank's steps closely, then NYSE and then NASDAQ movements, the latest to follow it seems is the phenomenon of Quarterly Results. Going by the recent trends, it appears that we Indians have got a strong appetite for anything from Uncle Sam's land. The Stock market especially appears to be hell bent to go after anything that is coming from the US. Even the hangover on the US presidential results had seen market shivering in cold. The NASDAQ effect still impacts the local markets today. And now one more offering - Quarterly Results - is on our plate. These are enough recipes to send shivers down the spine of a common investor. Don't you believe so?
The phenomenon of Quarterly Results has of late started catching the fancy of our markets. So, what are they and why there is so much hype and hoopla about it? Quarterly Results, as the name suggets, is the announcement of the operational results by companies at the end of each and every quarter of a financial year. For instance, if financial year of a company is from April to March, at the end of every quarter i.e. June, September, December, and finally March, its quarterly results would be announced. Now the investor who was actually waiting for a year-end result will have to grapple with the financials of a company four times a year. Not an easy task indeed. Right? …To some extent. But what actually does the emergence of this phenomenon suggest? Is it a good thing to have? Is a long-term investor, who is looking at a long-term horizon say 3-5 years down the line, required to take the pain of spending so much time that too on such a short-term performance of the company. The common sense, though that is rare in a wild market like this, would suggest, no. Take for example, the recent quarter results announced by Infosys. Even before the company results came out you had whole lot of research analysts coming out with different earning numbers, you had upgrade results, downgrade results. Some giving buy recommendations, some hold and some, sell. You may had thought what the hell I have to do with these reports throwing out at me, when I invested from a 5-year time horizon perspective. You may be wondering what purpose these quarterly results serve?
It's true, quarterly results are a good thing to happen to our markets and we should welcome such refreshing and good changes even if it is copied from a phoren land. In today's changing business landscape where technology's obsolescence rate are so high, international trade barriers are falling and information dissemination is rapid and fast, there needs to be room for greater transparency, information sharing among a company and its shareholders, a greater say of shareholders in the company’s affairs, in decision making process etc. If a company is facing problems and is destined for doom and you as a shareholder come to know about that at the end of the year, by that time your investments could have drained down the gutter and you could not do anything. A quarterly result report atleast gives you the idea what holds for you, the company and of course your investments in the future. And if you find anything wrong with the company or do not have confidence in the business strategy of the company management, you could look for other investment opportunities.
Though there is no denying the fact that daytrading and speculations, short-termism are the surest way to destroy your investments, at the same time as an investor one should also keep in mind that the share certificate is not just a piece of paper which you can put inside a pillow and sleep over it forever. No, you should not. Remember a quarterly result report is like your child's result card, which you evaluate on a weekly, monthly, quartely, half yearly and finally on yearly basis. If you learn that the child is not doing well you try to help him improve. The same holds good for investments too. So, do take care of your hard earned money and your investments. Don't you agree there is nothing like easy money? Do evaluate your investments on a regular basis. And be happy that Quarterly Results are here to help you a lot.
Amit Singh
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