This is Crazy: S&P 500 2009 Forecast to $48.52?

I love the original National Lampoon’s Vacation!  This scene with Chevy Chase and Christy Brinkley is a classic.  The “this is crazy” line struck me when I saw the slide below.  Thought I’d indulge in posting the video.

A recent post from Paul Kedrosky on Infectious Greed shows a slide said to be compiled by my favorite Out of The Box analyst, John Mauldin.  In it, it shows 2009 consensus earnings on the S&P 500 to be at 48.52 as of October 14, 2008.  I have not done the homework to check the facts, as Paul and John are two sources I trust; but if it were true and if the analysts are right (always a big if), then we have a ways to go down from here, particularly with multiple compression at a sub 15x number.

However, I am more willing to bet that, as usual, analysts are over exaggerating their EPS models and this time to the down-side.  It’s an interesting thing if Wall Street can make more money being bearish than bullish.  If this becomes true, “this is crazy” will be a common phrase among brokers.

A useful slide of the cuts to analyst S&P 500 forecasts for 2009.

Attributed to John Mauldin by Paul Kedrosky: A useful slide of the cuts to analyst S&P 500 forecasts for 2009.

Tracking 2009 S&P Forecast Cuts
Paul Kedrosky (John Mauldin), Infectious Greed, October 21, 2008

“This is Crazy”
National Lampoon’s: Vacation, YouTube, Accessed October 21, 2008


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