Wall Street Earnings Forecasters Have Been Hopelessly Over-Optimistic For The Last 20 Years

Definitely check out Jim Bianco’s presentation at The Big Picture conference, where he talks about the state of the economy, earnings, and the inevitable failure of the Fed.

Two charts really stood out to us.

The first shows S&P earnings vs. what S&P earnings had been expected to be by analyst 12 months previous going back to 1991. For the most part, the lines have been close.

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Photo: Jim Bianco, The Big Picture

But what’s really interesting is the second chart showing the relationship as a spread. For basically 20 years, Wall Street earnings forecasters have been habitually over-optimistic, and S&P earnings almost always miss, with just a few tiny exceptions.

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Photo: Jim Bianco, The Big Picture

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