Tuesday, July 20, 2010

FORWARD EARNINGS ANALYSTS ON AVERAGE 100% TOO OPTIMISTIC

Mish has a good post here citing a new study which shows that forecasts of S&P 500 companies' earnings by analysts over the last twenty-five years have been wildly and consistently off, on average too high by 100%.

He mentions five factors, not the least of which is talking their book.

Salesmen.