Don’t Get Fooled: How to Spot Companies That Lie About Earnings

Investors use earnings season as a key tool for decision making - but you might not be able to believe everything you hear. On Wednesday afternoon Money Morning's Chief Investment Strategist Keith Fitz-Gerald appeared on Fox Business with Melissa Francis to discuss a recent survey with a shocking statistic. Turns out about 20% of companies misrepresent or lie about their earnings - a hefty number when you consider you could be invested in one of these companies. "This is one of the greatest games going," said Fitz-Gerald. CFOs who were surveyed admitted to "managing" earnings reports - and their reasons highlight how investors are not their top priority. Fitz-Gerald calls the whole scheme "financial hocus pocus" - but don't worry, there are ways to protect your portfolio from these misleading companies. "Investors should not be scared of stocks, but this should serve as a colossal slap in the face that they need to get serious about how and what they buy," warned Fitz-Gerald. Watch the accompanying video to see Fitz-Gerald's analysis on how you can decipher earnings reports to avoid getting fooled.