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Gloomy Earnings Prospects Hold Key to Stock Buying
The consensus estimate of earnings for the Standard and Poor’s 500 Index for 2009 is currently about $83. The index itself is currently standing at about 904. That means the market is trading on only 10.6 times next year’s forecast earnings, far below the historical average multiple.
So it is a screaming buy, right?
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Not so fast.
“Consensus” estimates of earnings lag reality substantially. Because they include an average of all earnings forecasts over a considerable period, forecasts made in late September…
2Jan2009 | Money Morning | 0 comments | Continued
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