Only in years of strong growth, such as 2003 to 2006, when actual earnings caught up with earlier predictions, do these forecasts hit the mark.
Thursday, July 22, 2010
Analyst estimates - reality check!
Economix points to McKinsey research which highlights the wildly over-optimistic nature of earnings-growth estimates of equity analysts for the past quarter century - ranging from 10-12% annually, compared with actual growth of 6%!
Only in years of strong growth, such as 2003 to 2006, when actual earnings caught up with earlier predictions, do these forecasts hit the mark.
Only in years of strong growth, such as 2003 to 2006, when actual earnings caught up with earlier predictions, do these forecasts hit the mark.
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