Just a quick note here to address the bullshit of earnings estimates. Now earnings estimates once upon a time were used as a gauge for investors and traders to benchmark an equity valuation on a particular company. The idea being the valuation should reflect the earnings estimates. If the company beats the estimates it suggested the price of that equity should rise because people, using the lower than actual estimate, had priced the equity too low. And the opposite true for an estimate miss. However, in today’s all time high market price and valuations I really don’t care what the estimates are and whether a particular company beat its estimates. If I’m going to pay you more than anyone ever has to own a slice of your company then I want to know how you are doing relative to history. So please keep your estimates and give me an historical comparison, i.e. to last quarter, to last year and to your 3 year average. Are you in fact, doing better than you ever have in order to support your highest ever valuations?? And don’t give me just earnings because like Catepillar, it’s easy in the short term to create an EPS at whatever level you wish. So give me revenues. Not that revenues can’t be brought forward through various tactics but it is much more difficult to manipulate sales than earnings. It drives me nuts that any report on earnings and even revenues only gives a comparison to estimates and totally ignores an historical comparison. The funny thing is we used to get the historical comparison. Is it they don’t want to show us the historical? Easy to create an underestimate but very difficult to change the past. Ah the bullshit is bountiful and ubiquitous. But let’s keep playing the game and see where this all leads. So put on your pom poms, your cheerleading skirts and give me a B-T-F-A-T-H! BUY THE FUCKING ALL TIME HIGHS…..GOOOOO MARKETS!!!!!
P.S. Just a point of common sense…. If the market is not yet strong enough to stand on its own two feet, given Fed bond purchases continuing (although tapering on the front end of the curve) and rates are being held at zero how do we get to a stronger economy than ever before as defined by the all time high prices and valuations? I don’t have to know any more than those two facts. One doesn’t have to be anything but an intelligent four year old to understand the conflicting nature of those two phenomena. When a star quarterback is wearing a sling the probability of a win decline as depicted in the odds. However, the market is looking at the sling and suggesting the highest probability ever of a win. It does not make sense no matter how many market pundits try to spin it to me. And quite honestly I am certain traders are not longing this market nor are money managers. It begs the question then… who is longing this market folks? The answer to that question will explain more than we could even imagine.