All of the "top down" indicators for nonfinancial profits I use have
taken the steepest drops in decades and point to sharp down
earnings for Q4 '08 and likely for Q1 '09 as well. The declines in
the indicators pitched steeply downward in Sept. '08, marking
a sharp change in the outlook for profits in short order. Small
wonder the stock market crashed during the same interval.
Now, the market is discounting a bad earnings quarter, so results
and corporate guidance looking forward as released will disclose
how ready investors are to sit through bad numbers now in lieu of
prospective recovery later in the year. On average, a market
bottom discounts the initial upswing in the earnings cycle by 6
months. So, even if the stock market does treat the oncoming
earnings news with a rude sell-off, one should not readily conclude
that the year is lost based on the current reports.
I have ended full text posting. Instead, I post investment and related notes in brief, cryptic form. The notes are not intended as advice, but are just notes to myself.
About Me
- Peter Richardson
- Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!
No comments:
Post a Comment