EPS Earnings Season Kicks Off

Wall Street Greek covers earnings season each quarter. Advance to our home page to see current news.

Ah the fond memories... It's earnings season again, despite the still sparse load of reports this week. It seems someone arbitrarily decided Alcoa's (NYSE: AA) quarterly report should mark the beginning of the season, likely because it's the first reporter within the Dow Industrials.

It's that time of year... ah yes, I remember it well. As an analyst, earnings season fired up my adrenaline and got me up in the morning. I would arrive to my overburdened desk of up to 40 names that I followed as a sell-side analyst without an assistant at Mickey Mouse Shop Incorporated with fire in my eyes, or was it panic. Mickey Mouse Shop was so backwards that twice the workload matched up against half the pay of normal Wall Street analysts, who also had a couple assistants to help them manage their 12 to 15 total names.

However, my counterparts at those firms would point out that our final product lacked the content that their in-depth stock research report held. Ah yes, it was a very limited medium Mickey designed to communicate analysts' views. However, my own due diligence effort was in no part shorter than the class of Wall Street, and my picks were often chosen to represent the firm's stock pick of the week, since I was viewed reliable to produce winners. Those related special reports in particular were just as long as the class of "the street."

Yes, earnings season was hell! Imagine waking up knowing you had 5 or more earnings reports to follow every single day of the week, and knowing you would listen to each and every conference call and issue a note to clients on each report within minutes of the release. Stressful? Not for most Mickey Mouse club participants who simply faked their way through eight hour days while "The Greek" turned out the lights every night.

But your trusty Greek took it as a challenge. Guess what, I kicked @ss at it as well. But, don't congratulate Mickey for that; yours truly had no guidance as he was baptized by fire, following 15 names (and another 100 on a factual only basis) as a newly hired analyst fresh from grad school. Heck, I didn't even find earnings models waiting for me. But, as quickly as I blamed my predecessor for his apparent negligence, I noticed the great majority of the club had also found no need for financial modeling. One foolish supervisor even once dared to order me, "Don't build earnings models. I don't have them." She followed major financial sector firms, and you are buying based on those baseless recommendations. Fear not though, most of those ideas were simply pick-pocketed from analysts at major firms like Merrill Lynch (NYSE: MER) anyway.

Ah yes, earnings season at Mickey Mouse Shop brings back (wait a second while I throw up) fond memories. But, before I condemn the whole Mickey Mouse Club, I should note that there are and were a handful of good analysts there, who also had a conscience. Can you imagine that, a conscience on Wall Street! I mention the good ones here by name from time to time, and when I do, you know I mean it.

Mickey Inc. has since been exposed as a paper brand hiding behind historical glory. It's middle managers have been exposed across other business lines, even held partly responsible for America's recent economic strife. In its usual reactionary fashion, the cartoon company went so far as to fire Goofy, the CEO of one of its units after the bad publicity surfaced last year. "The Greek" though, like Zorbas' description of God, hates a half-devil ten times more than an Arch Devil, and a half finished job just the same.

Earnings Season Proper

Your lesson here is that not all firms nor all analysts are cut from the same cloth. Be as careful in selecting your advisors as you are in selecting your stocks. From my personal experience, there is a great variety to choose from.

Earnings season keeps analysts, traders and portfolio managers on caffeine 24/7. When it concludes, they exhale, and only then notice how exhausted they really are. These hard working folks, with stress loads most of you would find unimaginable, deserve recognition. For the most part, they're seeking to do a good job for their own survival in a performance based industry not short of competition, and to do you right as well. God bless the righteous and hard-working class of Wall Street, and best wishes this quarter.

Article interests: AMEX: DIA, AMEX: SPY, AMEX: SDS, AMEX: DOG, NYSE: NYX, Nasdaq: QQQQ, AMEX: QLD, NYSE: GS, NYSE: LEH, NYSE: MS, NYSE: JPM, NYSE: BAC, NYSE: WB, NYSE: MHP. Please see our disclosure at the Wall Street Greek website.