Question about protecting yourself from company not beating earning eastimate
The best thing to do to avoid this is not to sell as you've described. What purpose does it solve? If you're speculating, set a price at which you want to cash out and put a limit order. If you're a long term investor, then unless something fundamental has changed - why would you sell?
"Yes, this is possible with some companies. When you buy shares of stock through a stock broker, the shares are kept in ""street name.""  That means that the shares are registered to the broker, not to you.  That makes it easy to sell the stock later.  The stock broker keeps track of who actually owns which shares.  The system works well, and there are legal protections in place to protect the investors' assets. You can request that your broker change the stock to your name and request a certificate from the company.  However, companies are no longer required to do this, and some won't.  Your broker will charge you a fee for this service. Alternatively, if you really only want one share for decoration, there are companies that specialize in selling shares of stock with certificates.  Two of them are giveashare.com and uniquestockgift.com, which offer one real share of stock with a stock certificate in certain popular companies.  (Note: I have no experience with either one.)  Some companies no longer issue new stock certificates; for those, these services sell you a replica stock certificate along with a real share of electronic stock.  (This is now the case for Disney and Apple.) With your stock certificate, you are an actual official stockholder, entitled to dividends and a vote at the shareholder meeting. If this is strictly an investment for you, consider the advantages of street name shares: As to your question on buying stock directly from a company and bypassing a broker altogether, see Can I buy stocks directly from a public company?" I understand you're trying to ask a narrow question, but you're basically asking whether you should time the market.  You can find tons of books saying you shouldn't try it, and tons more confirming that you can.  Both will have data and anecdotes to back them up.  So I'll give you my own opinion. Market timing, especially in a macro sense, is a zero-sum game.  Your first thought should be: I'm smarter than the average person; the average person is an idiot.  However, remember that a whole lot of the money in the market is not controlled by idiots.  You really need to ask yourself if you can compete with people who get paid to spend 12 hours a day trying to beat the market. Stick with a mid-range strategy for now.  Your convictions aren't and shouldn't be strong enough at the moment to do otherwise.  But, if you can't resist, I say go ahead and do what you feel.  Regardless of what you do, your returns over the next 3 years won't be life changing.  In the meantime, learn as much as you can about investing, and keep a journal of your investment activity to keep yourself honest. "P/E is price to earnings, or the price of the company divided by annual earnings. Earnings, as reported, are reported on accrual basis. Accrual basis accounting is...without going too deep, like taking a timeline, chopping it up and throwing different bits and pieces of every year into different piles.  Costs from 2008 might show up in 2011, or the company might take costs in 2011 that aren't necessarily costs until 2012.  Examples would include one-time charges for specific investments, like new shipping centers, servers for their hosting services, etc.    Free cash flow is the amount of cash Amazon is generating from its operations. Free cash flow is almost always different from earnings because it's the amount of Earnings + adjustments for non-cash activities - capital expenditures (long-term investments.)  Earnings is one thing.  Cash generation is a completely different animal.  There are plenty of companies that ""earn"" billions, but only have a few hundred million in cash to show for it because their earnings have to be reinvested into new stuff to grow/maintain the business.  To have a free cash flow yield of 2.5% is to have a company valued at $40 for each $1 of free cash flow that the company generates each year.  $1/$40 = 2.5%.  SGA = Selling, General, &amp; Administrative expenses.  These are the costs of running the company - paying salaries, advertising, etc.  This cost is second only to COGS, which is Cost of Goods Sold.    Currently, Amazon pays $.774 for every $1 product it sells.  Its operations add another ~$.20 to that total.  After taxes, Amazon keeps about 2 cents of every dollar's worth of product it sells.  This 2 cents is Amazon's net margin of 2%.  Net margin is (net income)/(sales).  If Amazon earned $3 for every $100 in sales it would have a net margin of 3%.     Let me know if this makes no sense.  If there's anything in particular that is especially confusing, definitely reply and I'll better clarify on specific items.  Fire away with any questions, also.  I love to discuss finance and accounting." "There are two different issues that you need to consider: and The answers to these two questions are not always the same.  The answer to the first is described in some detail in Publication 17 available on the IRS website. In the absence of any details about your situation other than what is in your question (e.g. is either salary from self-employment wages that you or your spouse is paying you,  are you or your spouse eligible to be claimed as a dependent by someone else, are you an alien, etc),  which of the various rule(s) apply to you cannot be determined, and so I will not state a specific number or confirm that what you assert in your question is correct.  Furthermore, even if you are not required to file an income-tax return, you might want to choose to file a tax return anyway. The most common reason for this is that if your employer withheld  income tax from your salary (and sent it to the IRS on your behalf) but your tax liability for the year is zero, then, in the absence of a filed tax return, the IRS will not refund the tax withheld to you. Nor will your employer return the  withheld money to you saying ""Oops, we made a mistake last year"".  That money is gone: an unacknowledged (and non-tax-deductible) gift  from you to the US government. So, while ""I am not required to file an income tax return and I refuse to do voluntarily what I am not  required to do""  is a very principled stand to take, it can have monetary consequences. Another reason to file a tax return even when one is not required to do so is to claim the Earned Income Tax Credit (EITC) if you qualify for it. As Publication 17 says in Chapter 36, qualified persons must File a tax return, even if you:   (a) Do not owe any tax,   (b) Did not earn enough money to file a return,   or   (c) Did not have income taxes withheld from your pay. in order to claim the credit. In short, read Publication 17 for yourself, and decide whether you are required to file an income tax return, and if you are not, whether it is worth your while to file the tax return anyway. Note to readers preparing to down-vote: this answer is prolix and says things that are far too ""well-known to everybody"" (and especially to you), but please remember that they might not be quite so well-known to the OP." I would not hold any company stock for the company that provides your income.   This is a too many eggs in one basket kind of problem. With a discounted stock purchase plan, I would buy the shares at a 10% discount and immediately resell for a profit.   If the company prevents you from immediately reselling, I  don't know if I would invest. The risk is too great that you'll see your job lost and your 401k/investments emptied due to a single cause. "None of that is filtered my way as a ""part owner"". Sure it is, it's just not always obvious. When a company makes money it either: Other then the fourth option, the first three all increase the total value of the company.  If you owned 1% of a company that was worth X, and is now worth X+1, the value of that 1% ownership should go up as well. One model of the value of a share of stock is the present value of all future cash flows that the company produces for its shareholders, which would be either through dividends, earnings (provided that they are invested back into the company) or through liquidation (sale).  So as earnings increase (or more accurately as projected future earnings increase), so does the value of a share of the company. Also note that the payment of dividends causes the price of a stock to go down when the dividend is paid, since that's equity (cash) that's leaving the company, reducing the value of the company by an equivalent amount. Of course, there's also something to be said for the behavioral aspect of investing, meaning that people sometimes invest in companies that they like, and sell stock of companies that they don't like or disagree with (e.g. Nordstrom's)." You are omitting how the company made 120 million in the previous year and may be facing a shrinking market and thus have poor future prospects. If the company is shrinking, what will the shares be worth down the road. Remember companies like AOL or Blackberry? There was a time they had big profits before things changed which is the part you aren't considering here. If the company has lost something big on its earnings, e.g. the oil wells it owned have run out of reserves or the patents on its key drugs have expired, then there could be the perception that the company won't be able to compete in the future to continue to deliver earnings. Some companies may well end up going broke as one could look at GM for a company that used to be one of the largest car companies in the world and yet it ended up going broke. A per diem payment is a cost of doing business for the company, not for you. They can claim it (probably); you can't (definitely).