Posts filed under “Valuation”

Analysts’ Profit Forecasts: Worse Than Ever!

Analysts_2
 

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"At the start of the year, profits at banks, brokers and insurance companies were projected to rise 22 percent in 2008, according to the average estimate of analysts surveyed by Bloomberg. They’re now expected to decline 48 percent."

-Bloomberg’s Chart of Day

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How bad are fundie analysts as a group? Well, as the chart up top shows, the earnings forecasts of Wall Street Analysts "missed the mark by the biggest margin in at least 16 years last quarter," according to Bloomberg data.

How often did the Street get it right? Try 6.7% for the companies in the S&P500 Index in Q2. That’s the  worst showing since Bloomberg began tracking this data way back in 1992.

While some blame the credit crunch, Oil, and Housing as the problem, a more likely source of error is Reg FD. Analysts have been increasingly wrong since the adoption in October 2000 of Regulation Fair Disclosure. The regulations barred CEOs and CFOs from giving the inside dope to the outside dopes. No more whisper numbers to favored bankerd or their pet analysts.

What does this mean to investors? Well, traditional Wall Street Research seems to be of minimum value to investors. Its no surprise that the fastest growing form of analytics  (yes, I am talking my own book here)  is quantititive — no C-level execs needed. 

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Previously:
Follow Analysts at Your Own Financial Risk (June 2008)
http://bigpicture.typepad.com/comments/2008/06/follow-analysts.html

Schwab: We Don’t Need Your Stinkin’ Analysts (April 2008)
http://bigpicture.typepad.com/comments/2008/04/schwab-we-dont.html

Source:
Analysts’ Profit Forecasts Missing More Than Ever: Chart of Day
Lynn Thomasson
Bloomberg, Aug. 20 2008
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ar9FYyyXfzdo

Category: Corporate Management, Earnings, Investing, Quantitative, Really, really bad calls, Valuation

Analysts’ Profit Forecasts: Worse Than Ever!

Category: Corporate Management, Earnings, Investing, Quantitative, Really, really bad calls, Valuation

US Bank Derivative Exposure

Category: Credit, Derivatives, Valuation

IndyMac Swift Boaters Strike Back!

Category: Corporate Management, Credit, Legal, Politics, Valuation

His Name is Mudd

Category: Bailouts, Corporate Management, Credit, Legal, Real Estate, Valuation

Substantial Implicit Subsidy to GSE Shareholders “Unwinding”

Category: Credit, Psychology, Real Estate, Valuation

Substantial Implicit Subsidy to GSE Shareholders “Unwinding”

Category: Credit, Psychology, Real Estate, Valuation

The Battle Over the Bottom in Financials

Another fun discussion with Henry. As you can see, I have trouble forming an opinion . . .

 

Note: I have a great deal of respect for Tom Brown — like Dick Bove, another smart guy I hate being on the opposite side of a trade from — but he has simply been way too early in his bottom calls.

Source:
Street Fight: Analysts Battle Over the Bottom in Financials
Henry Blodget
Yahoo, August 12, 2008
http://finance.yahoo.com/tech-ticker/article/47121/Street-Fight-Analysts-Battle-Over-the-Bottom-in-Financials

See also:
RBS slumps to one of biggest losses in UK banking history
Angela Monaghan
Telegraph, 10:35am BST 08/08/20081
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/08/bcnrbs208.xml

Wachovia boosts loss to $9.11 bln, cuts more jobs
Jonathan Stempel
Reuters Aug 11, 2008 7:02pm EDT
http://www.reuters.com/article/newsOne/idUSN1139894220080811

Michael Price Shorts Citigroup, Sees Few Banks to Buy   
Jeff Kearns
Bloomberg, Aug. 12 2008
http://www.bloomberg.com/apps/news?pid=20601213&sid=a57Gqx3lxcc4&

 

Category: Corporate Management, Credit, Derivatives, Valuation, Video

Bank Losses: Half Trillion and Counting

Category: Corporate Management, Credit, Derivatives, Finance, Valuation

Steel Owes Thain a Royalty Payment

Category: Corporate Management, Credit, Earnings, Legal, Valuation