Three ways that investors might try to forecast current-year earnings:
1) Use analysts' estimates
2) Assume results will approximate last year's earnings
3) Calculate an average of the last several years' worth of earnings.
Of the three alternatives, analysts' estimates were the worst predictors of S&P 500 earnings from 1996 to 2016.
Why then, are so many people still rely on analysts' estimates?
Promote On:
to Wednesday, August 10, 2016 - 6:40pm