Investors often complain about their money managers losing their money.
But at the very least, those money managers often get a lot of leeway because their investment moves are assumed to be based on informed decisions.
Well, that assumption may not be true.
Goldman Sachs’ Portfolio Strategy Research team led by David Kostin just published the some things they learned from their fund manager clients.
One particular bullet stuck out:
While investors focus on the European sovereign debt and bank problems and Fed policy, our client discussions reveal that portfolio managers are not aware of the wave of negative preannouncements across the market. The reduction between the midpoint of new guidance and consensus estimates prior to the pre-announcement ranged from 2% to 20%. The median 2Q reduction equaled 4%. Firms lowering quarterly earnings guidance include: Pall (PLL), Nucor (NUE), Ryder Systems (R), Proctor & Gamble (PG), Cardinal Health (CAH), Texas Instruments (TXN), Starbucks (SBUX), Autodesk (ADSK), FedEx (FDX), Jabil Circuit (JBL), Bed, Bath & Beyond (BBBY), and Adobe Systems (ADBE).
Many of these companies are major economic bellwethers, which reveal intimate details about the economy. Even though these particular stocks may not be in the portfolios of these particular fund managers, you would hope that they would be paying attention.