Rational or Wishful Expectations? - FINANCIAL-24
In the blog of April 11, we asserted that “For Q4 2017, the market expectations are for a 12 percent year-over-year increase in non-GAAP earnings. Our prediction is that such expectations will not be met; indeed, the odds of Q4 earnings growth being lower than 12 percent exceeds 80 percent. Thus, we are much less upbeat than the market view."
Time issues the final verdict on all predictions and our above assessment on Q4 earnings projections was correct. Currently, the market expectation (according to Facset) is that for Q4 2017 earnings will grow a paltry 3 percent. Our take on this backtesting of market views is that the financial news media should more actively engage in challenging predictions that drive markets.
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