The Bottoms-Up Gang Doesn't Budge

One thing about the current spate of weakening economic data points to be aware of is that it hasn’t yet translated into lowered earnings expectations from the sell-side.  Since the bottoms-up approach (discounted cash flow analysis etc) is so prevalent in the way The Street rates stocks, it will be unsurprising to see them not react to this macro softening until way past the point where it actually helps anyone.

Same as it ever was.

Here’s the LA Times:

Among the 9,015 analyst recommendations on S&P 500 stocks, only 300 — or 3.3% — are to sell, according to data provider FactSet. That’s the same proportion as a month ago, when the economy was considered to be in better shape.

With large banks slashing GDP growth estimates (Goldie just went to 2% for Q2), estimate cuts are probably right behind.  We’ll see if the stocks discount these before anyone on the sell-side starts chopping.

Source:

Stock-market analysts’ optimism could prove dangerous (LA Times)

Tags:

$SPY

hat tip LWinthorpe

 

What's been said:

Discussions found on the web
  1. Making Money Online commented on Sep 22

    … [Trackback]

    […] Read More to that Topic: thereformedbroker.com/2011/06/20/the-bottoms-up-gang-doesnt-budge/ […]

  2. bitcoin loophole commented on Sep 30

    … [Trackback]

    […] Find More to that Topic: thereformedbroker.com/2011/06/20/the-bottoms-up-gang-doesnt-budge/ […]

  3. Sex commented on Oct 29

    … [Trackback]

    […] Info to that Topic: thereformedbroker.com/2011/06/20/the-bottoms-up-gang-doesnt-budge/ […]

  4. 먹튀검증사이트 commented on Nov 04

    … [Trackback]

    […] Find More to that Topic: thereformedbroker.com/2011/06/20/the-bottoms-up-gang-doesnt-budge/ […]

  5. Digital transformation Consultant commented on Nov 04

    … [Trackback]

    […] Find More on that Topic: thereformedbroker.com/2011/06/20/the-bottoms-up-gang-doesnt-budge/ […]

  6. tangerine online commented on Nov 26

    … [Trackback]

    […] Read More on on that Topic: thereformedbroker.com/2011/06/20/the-bottoms-up-gang-doesnt-budge/ […]

  7. cc dumps commented on Nov 27

    … [Trackback]

    […] Read More here on that Topic: thereformedbroker.com/2011/06/20/the-bottoms-up-gang-doesnt-budge/ […]