So far, so not so bad!
That’s how earnings are shaping up and we are pleased to see so many companies beating what are fairly low expectations but they are expectations that are baked into the cake nonetheless. Not only that but we’re seeing something we haven’t seen in a very long time – Upside Guidance! Just this morning (7:30), we have upside guidance from CHE, PBG, PFCB and PFS while last night CREE, CYMI, RCRC and WSII all raised guidance and NOT ONE company out of 41 reporting last nightguided down. What kind of recession is this?
Earnings beats are outnumbering misses by 2:1 so far and some of the beats are mind-boggling, making you wonder what kind of bear poop the analysts have been smoking when ECA, for example,can make $1.26 per share when 24 professional analysts who follow the company expected earnings of just .69. AAI made .21, not the .04 expected by the people who are paid to follow them predicted and not one of the 9 analysts following IBKC were within 15 cents of their .77 earnings with consensus about 30% lower than that. Of course there are misses too but we expect misses in this environment but the hits are not justifying a sub-7,632 Dow, which is our lower-end target.
We had an extensive conversation in Member Chat last night about the true value of the market and I suppose I can sum it up with this exerpt from my morning comment toDa Bears(these things go on all night): “I don’t understand why people can’t accept the fact that companies have value, that they are able to adapt and become profitable, even in adverse environments. Perhaps they may not do as well and perhaps they will have a few bad quarters and take some losses and perhaps they will even default on some debt but that DOES NOT mean they will never recover. It does not mean they are worthless, it does not mean that you should bet against everything that dares to show signs of recovery becauase the ENTIRE course of human and market history is against your premise. The markets ALWAYS recover – Recession, Depression, War, Terrorism, Bubbles, Scandal – the markets always come back and there are winners and losers. If you are going to insist that everyone is a loser you will very likely be disappointed….”
You know I am very happy to state the…
