Now let's talk S&P 500 earnings.
It's 2007, and the stock market is booming to an all-time high.
Analysts foresee the S&P 500 earning $94.20 in 2008, a new record.
"It's a really good investing environment in general right now," an
analyst tells Bloomberg. In fact, it was one of the worst in history.
The S&P ended up earning half the amount analysts expected in 2008, and stocks plunged nearly 50%.
By 2009 gloom was pervasive. Bloomberg lamented "the longest earnings slump since the Great Depression." Analysts expected the S&P 500 to earn $53 a share in 2010, and $63 in 2011.
In reality, the index earned $83 and $96, respectively. Here again,
for the last five years you could have been a top performer by taking
analysts' earnings estimates and multiplying or dividing them by two.
Can we just admit that no one knows what earnings will do in the future?