Comments on: Earnings Are Horrible - Why It May Not Matter

by: Vin

Tue, 14 Apr 2009 01:30:05 +0000

Babak and Yuval,

Take a look at this link, it’s chart of the day for S&P earnings: http://www.chartoftheday.com/20090320.htm?T

Yuval posted a link to excel spreadsheet, it provides estimates for earnings for 2009 and 2010. Here’s the reported EPS by year, as shown on chart of the day:

2006: $81.51
2007: $66.18
2008: $14.88
2009: $28.51 est.
2010: $35.31 est.

Operating EPS PE is 18 (avg) in 2009 and PE of 12.3 (avg) for 2010.

S&P looks fairly valued for 2009 but not so much for 2010 earnings. The Q1 earnings and the guidance are the key now…

I’ve already lightened up on all my long positions and have taken a small position in TZA (short 3X Russel 2K). Good Luck..

by: mani

Fri, 10 Apr 2009 04:45:20 +0000

Great post ,very very true the markets are driven more by sentiments and feelings rather facts.When most of analysts feel and voice that this rally is not real ,a suckers rally and so on but the market continuous to make highs every day taking over new levels and resistances .

by: Yuval

Fri, 10 Apr 2009 03:16:26 +0000

In Barrons two days ago they claimed that the earnings estimates for the S&P are between 39$-57$, the mid point of 48$ gives PE of 17.8.
According to Standards and Poor the estimated PE is 18.6.
(www2.standardandpoors.com/spf/xls/index/SP500EPSEST.XLS )

In both cases looks like a high number to me…