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Will We Ever Learn? 36 Years Of Over-Optimistic Earnings Growth

Submitted by Tyler Durden on 10/07/2013 22:20 -0400

Ever get that feeling of Deja Vu when year after year things don't go quite as well as expected in the beginning of the year. We are sure the Fed does, but the chart below should provide enough evidence of the "value" being added by a consensus of equity analyst extrapolators over the last 36 years. On average consensus EPS growth rates have performed the anti-Gartman - slumping from over-optimistic highs of the left to dismal reality check lows on the left. Of course, hope remains that this year will be different... but it doesn't appear to be heading that way.

Since 1976, Morgan Stanley shows the average consensus EPS growth rate trajectory among the consensus... doesn't seem to be so "accurate"...

But it remains assured that this time will be different if we look ahead yet again...

Charts: Morgan Stanley

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Mon, 10/07/2013 - 22:21 | 4032826 surf0766

Overly optimist people often make bad decision which cause people to loose money.

Mon, 10/07/2013 - 22:35 | 4032849 Seize Mars

Wow.

loose/lose

Is it the fluoride in the water?

Tue, 10/08/2013 - 05:23 | 4033202 Australian Economist

I could care less.

Mon, 10/07/2013 - 22:23 | 4032828 markmotive

Just part of maintaining an Empire in Decline

http://www.planbeconomics.com/2013/10/three-aspects-of-maintaining-empir...

Tue, 10/08/2013 - 06:48 | 4033229 BandGap

While this certainly applies to the United States, if you consider it with a bit more time it also applies to China, Japan and the EU in at least 2 out of 3 of the elements of decline.

Mon, 10/07/2013 - 22:22 | 4032831 Spastica Rex

I'm sorry about the dress, Aunt Polly. My Father said it was a size too big, but that I should be glad it wasn't a pair of boy's trousers.

Mon, 10/07/2013 - 22:28 | 4032843 philipat

Shouldn't really be any surprise. This is all junk put out for free to the Muppets to sell stocks, upon which result they all depend either directly or indirectly for those juicy yearend bonuses. Of course, aided and abetted by CNBS and the other financial comedy channels.

Mon, 10/07/2013 - 22:34 | 4032851 GeorgeHayduke

Maybe the whole idea of endless growth needs to be reconsidered.

Mon, 10/07/2013 - 22:55 | 4032903 Nobody For President

Sacrilege! Go wash your mouth out with soap!

Mon, 10/07/2013 - 22:58 | 4032908 Dapper Dan

“The greatest shortcoming of the human race is our inability to understand the exponential function.”
? Albert A. Bartlett

Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist. -Kenneth Boulding

-----------------------------------------------------------------------------------------------

Environmental Problems, Their

Causes, and Sustainability

C A S E S T U D Y

Living in an Exponential Age

See link

http://www.instruction.greenriver.edu/mcvay/ES204%20DE/ES%20docs/Living%20in%20an%20exponential%20world.pdf

Tue, 10/08/2013 - 00:40 | 4032989 NidStyles

You mean the belief that price stability and mild inflation are good things?

Mon, 10/07/2013 - 23:41 | 4032993 Bobportlandor

Wait till people conclude their spinning their wheels just to hold steady and decide there has to be a better way to live. Then watch the growth collapse.

I figure the good old days are gone.

Mon, 10/07/2013 - 22:56 | 4032906 carbonmutant

The Market is a cork on an ocean of bullshit....

Mon, 10/07/2013 - 23:06 | 4032927 booboo

Replacing production with paper, wage arb, mass layoffs, pushing pension obligations into the hands of Fraud Street hucksters, yea, they are buying time and that is about it, when it blows it is going to make 1930 style deflation look like a romp in the hay. Yes I said deflation, shoot me.

Will We Ever Learn? 36 Years Of Over-Optimistic Earnings Growth

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