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Generally, this means that something has gone wrong. Either there was a problem with the reporting process in general or with the stock in particular. That leaves investors to wonder if someone misled them, creating a false sense of positivity.
But that's not always the case, explained Cramer. He uses the case of Boeing as a cautionary tale, not about the company itself, but about how analysts can perceive a stock. He says that's what led Credit Suisse to downgrade such a strong stock on Thursday. sk
Taking a look back, investors breathed a sigh of relief on Wednesday when Boeing reported and raised its guidance substantially. The stock traded higher at first but then quickly unraveled after the company conference call.
The call revealed that the boost in earnings came from a wide range of Boeing planes, mostly older versions. Earnings did not come from the brand new 787 Dreamliner. As a result, investors assumed the worst, and the stock was crushed.
The problem, in his opinion, is in the process. Cramer has always been a proponent of doing your homework before investing. Those who didn't do their homework were freaked out by the conference call and ran for the hills.
---------------------------------------------------------- Read more from Mad Money with Jim Cramer Cramer Remix: Calling for this CEO's head Cramer: Beware moronic trading Cramer: Haters should sk back off of Yahoo ----------------------------------------------------------
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