The reason why I am short Amazon and Facebook into earnings is because I'm anticipating great results with weak guidance and then a selloff in the stock. This is the tried and true pattern of other firms such as Starbucks. Netflix actually had great guidance and the stock still went down. As an new investor I would assume the investing landscape is rigged. How could Netflix do well and still get clobbered? The stock has always had a high PE, so how come that matters all of a sudden? I would tell my 14 year old self that the macro data is now trumping the micro data. The economy is going into a recession. Therefore the market sells off the consumer discretionary stocks. This may seem weird that the market assumes Netflix will do bad during a recession, but the market has wisdom and its assumptions are usually correct. Hedge funds have to get out of these momentum stocks as they trip over themselves and sell at any price. The macro data is the only thing that matters when we go into a crash. You need to study the debt on the balance sheets of oil companies, the debt to GDP level of China, and the yield curve to make every single investing decision. These numbers are more important than Netflix's subscriber numbers. Hedge funds don't care about subscribers because they used Netflix as a proxy for high beta tech stocks during the upturn. They didn't care about valuation. Now as the economy falters, they start to sell Netflix, showing the entire stock was a house of cards. Amazon and Facebook are also houses of cards. The earnings don't matter as much as the macro data.