Irrational Market Reactions: Jos. A Bank Clothiers, Bed Bath & Beyond

Eddy Elfenbein submits: Here’s an interesting lesson on how irrational the stock market can be in the short-term. Last week, Bed Bath & Beyond’s (BBBY) stock fell after its earnings report. I follow that stock pretty closely and there wasn’t one single item in the earnings report that came as a surprise.

It was basically what any reasonable person should have expected. Yet the shares opened Thursday morning much lower, and they’ve rallied almost continuously since then. Right now, BBBY is slightly above where it was before the earnings report. Looking back at what happened, it just doesn’t make much sense. This is why I try to caution investors against timing the market.

Well, now a similar story has happened with Jos. A Bank Clothiers (JOSB). The company just reported terrific earnings of $2.36 a share, 11 cents more than Wall Street’s forecast. Yet the stock was hit last week on a poor sales report. Now the stock is higher than where it was before.

One of the great things about investing is that doing absolutely nothing can work to your advantage.

Unfortunately, the big jump in JOSB is being canceled out by the fall in Fair Isaac (FIC).