Friends,

Last week, Netflix kicked off earnings season with a bang. The company added 20 million subscribers and saw ad revenue more than double. The stock was up double-digits the next day.

Electronic Arts was not nearly as lucky. While results were fine, the company reduced its guidance for the rest of the fiscal year to reflect anemic growth. The stock dropped double-digits the next day.

If you were invested in either one of these companies, what should your reaction have been? Sell Netflix to lock in gains while buying Electronic Arts at a steal? Doing the opposite?

The tough truth: There's no one-size-fits-all answer to that. Two people can invest in the same stock for wildly different reasons, with different time frames, and different expectations for outcomes.

But we do have a simple question you can ask yourself no matter a stock's reaction to earnings:

Do these earnings provide support for my thesis, or do they provide evidence against it?

Before you buy any stock, you need to write down your reasons for doing so. We call that an investment thesis. And if you do this, you're not only ahead of 75% of retail investors, but you're set to make earnings season much more profitable in terms of the decisions you make.

Perhaps a stock purchase has to do with a new technology coming to market. Or maybe it has to do with lots of cash sitting on the balance sheet that you think will become a dividend. Or maybe you just think a stock is undervalued.

No matter your reasoning, write down why you own every stock in your portfolio.

Earnings season is just getting started. If you take an hour this weekend to perform this task, you're be able to digest all the news coming your way with far greater clarity.

Over the long run, wise decisions based on this new information will compound, creating generational wealth in the process.

Wishing you investing luck this earnings season,