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Blown Earnings Calls Started the Bull Market. One Day They’ll End It

  • Analyst estimates proved unreliable at market turning points
  • Even if robust forecasts come true, it’s no sure stock win
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Katie Koch of Goldman Sachs Asset Management says global earnings ’are robust.’(Source: Bloomberg)
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As the U.S. equity bull market heads into its 10th year with earnings underpinning the case for buying, consider this: at the most important turning points for stocks in the past decade, profit projections have been laughably wrong.

Take the start of this bull market, nine years ago today. Banks were failing, the economy was shrinking, and stocks had just suffered their worst year in seven decades. Equity forecasters were appropriately grim, predicting a double-digit decline in corporate income that would’ve ranked among the worst ever seen. Instead, earnings rose.