Valuing stocks based on what companies are expected to earn over the next year presents some thorny problems. That doesn’t mean investors shouldn’t pay attention to those expectations.
The Covid-19 crisis has put earnings estimates through the wringer. Over the next four quarters, analysts polled by Refinitiv forecast that earnings for companies in the S&P 500 will be down about 20% from a year earlier. At the start of the year they expected earnings growth of over 10% for the same period.
ceasarnova Spencerjakab My son.shares that opinion too, but he owns stocks in a few american companies of 20.
Spencerjakab Of course, it is time to blame expensive stock as the bull trap were full. The fake data can easily pump the stock market 20% in 1 month without any real improvement. We will see a huge dump soon.
Spencerjakab Remember: Stonks goes up.
Spencerjakab That’s why I laugh when people think it’s an indicator of the economy . It’s an indicator the wealthy are getting back stronger share of our economy . While we get the 60 yrs old save wages .
Spencerjakab I remember in Q1 2000 people saying valuations were sky high but there’s a good reason for it. There really isn’t. It’s a psychology condition that flies in the face of time tested economic tenets. I know what wins out in the end.