It is the mark of an instructed mind to rest satisfied with the degree of precision to which the nature of the subject admits and not to seek exactness when only an approximation of the truth is possible.This morning's opening missive will address top-down market valuation, explain why I believe the price-to-earnings multiple expansion beginning six months ago appears to be coming to an end and then go on to recap the forces that make me more bearish on corporate profits vis-a-vis the emerging and more bullish consensus. Given that the First Call total of S&P operating earnings for the first half of this year was about $30.50 a share and is estimated at $15 a share for the third quarter ending Sept. 30, 2009, it is safe to say that 2009 S&P operating profits will approximate $62 a share. First Call consensus S&P earnings forecasts for 2010 now run around $72 to $74 a share, for a gain of almost 18% year over year.
Kass: Bearish Arguments Are Roaring
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