Look Familiar?

April 10, 2017

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Look Familiar?

Here’s how you read the chart:

• The upper end of each squiggly line is the first Wall Street consensus estimate; the bottom of each line is the last.

• Note that for 2016 (the orange line), the first estimate was for $137 earnings per share on the S&P 500 Index, and the last was for $106. That’s a big miss.

• Also note that 2016 may end lower than the actual earnings for 2013 (the black line).

 

We use median P/E because analysts have historically been too optimistic in their earnings forecasts. This is why we don’t – and don’t believe you should – trust Wall Street estimates.

 

Another GREAT post from John Mauldin, read the entire article HERE.

 

 

 

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