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Markets Jittery, Earnings Strong

August 8, 2011 Leave a comment

With markets jittery and dipping into correction territory, here’s a follow up to my recent entry, Economy versus Earnings:

According to Thomson Reuters, as of July 29th:

  • The S&P 500 estimated earnings growth rate for Q2 is 10.3% based on companies reporting thus far. (16.3% if you exclude Bank of America)
  • 73% of the 327 companies in the S&P 500 that have reported have beaten estimates

Of course, earnings are backward-looking (they describe the past, not the future). But what this illustrates is that corporate earnings (part of the heart and soul of stock investing), are in fine shape right now.

Also, see my “Market yips” entry from June 16th: “Big up years, up a-little-years, and down years all have big individual up and down days. Stick with your strategy and don’t let market down days yip you into mistakes.” We can add to that: corrections routinely happen during perfectly fine market years, too.

Days like the ones lately aren’t easy to swallow, but getting whipsawed by a market correction is far worse.


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