The point was market shocks , reckless threats like these have to be taken seriously by global investors.
It’s the inevitable strategic default. I already forecast all this years ago, just surprised how fast America is speeding down the decline. Mathmatically they have to default/hyperinflate. So they will choose default. So, they have to somehow pull off “we aren’t going to pay YOU BAD GUYS but we will keep paying everyone else”. Obviously it’s unethical, and that is what Trump does.
Let’s follow up on this forecast Matt made in 2015…
In Q2 2015 the made-up earnings forecast was $107/share for Q2 2016. As I forecasted, those fantasy earnings never happened.
One year later here in Q2 2016 as reported earnings are expected to be be around $82.12 (prior qtr $86.44, less 5% decline). And so the actual as-reported ttm P/E will be around 2170/82.12 = 26.4X. Matt forecast 19.5X.
Hmm, not so “crazy” now. Time has past, and clearly I made the more accurate forecast. How was I so right, and Matt so wrong? Because I used real numbers.
am i wrong? S&P at all-time high and reported earnings are still incorrect. you were short, i was long, unless you ended up being long despite your obscenely high valuation, then you would actually be crazy.
It’s too late to revise your call now Matt, you called 19X, using a made-up forward earnings number, and you were wrong because of that. Feel free to make a new forecast now, and we can check up on that later.
My market bets are not directly relevant to this forecasting conversation. But I have been been global long the entire time, while additionally layering on S&P500 shorts at each new high (for example in Dec 2015 when you were making your dream-world call). Guess what happened? The market dropped because people are nervous at these levels, and I made additional return…which is how I outperformed in 2015, and 2016 YTD.
You got lucky so far, bad analysis, reckless bets holding 25X equities…it’s a long ways down kiddo.
i don’t see how you won the debate. my stance is still that reported earnings are bogus and useless. all you are saying is that reported earnings are still lower than operating earnings. congratulations, you’ve reiterated your exact same point 7 months later.
at least i know when i win and when i lose. the fact that you don’t makes you a terrible debater/conversationalist.
Because time moved forward and you were wrong. It’s not “a debate”, it’s a forecast, and forecasts can be checked against actuals.
Welcome to the finance industry.
it’s not a forecast. you’re still using the wrong data. i don’t accept your data and neither does anyone who works in this industry. if we’re not here to adjust earnings, we might as well call it a day and buy passive indices.
Maybe you’re here to hype markets, or maybe you’re the gullible hype-buyer.
But I’m here to do real analysis. And I’ll forecast using any data I feel like, especially AS-REPORTED REAL GAAP ACCOUNTING DATA as my anchor to reality. 
…or you don’t know what analysis is. you’re using the numbers that joe sick pack is using to pick stocks and you think you have some sort of advantage. why? “oh, this company is trading at infinity times earnings (following a write-off), it must be super expensive, i won’t buy it. i’m too lazy to learn how to adjust earnings and actually determine what something is worth outside of perfectly tranquil times where operating earnings and reported earnings are identical”.
Right, the embarrassing thing is that textbook P/E with no adjustments at all, beat your adjusted P/E by a mile. And this has been happening for years.
you don’t know what my numbers are… and you’re wrong about operating earnings. they forecast returns much better than your textbook p/e. what do you do during or after a recession, not invest because your p/e spikes to all-time highs, or do you switch to operating p/e on a whim?
You got beat by Joe six pack, LOL…a lot of good that CFA did.
Purealpha: I try to avoid the abrasive posters on internet forums, but I try to read each of your posts in the investing forum. It is a little like AF’s version of Cramer. Anyway, what do you think your edge is that generates the pure alpha? It seems you focus on psychological biases in the market. I see you getting a lot of heat lately, sure hope you stick around lol
Haha, AF’s Cramer. Hmmm, I don’t know what to think of that.
My thing is zooming way out, looking global macro-economic, forecasting probable outcomes (I’d rather get the big picture roughly correct, and blow the details). Biases are important, because they drive inaccurate probabilities being assigned by the market.
In this case the US GDP and S&P500 earnings forecasts are meaningless garbage. What they are forecasting is an improbable up-case, base-case (which keeps showing up in “actuals” aka reality) is really quite grim.
pa has yet to state what he plans to do at a market bottom when his preferred p/e multiple is screaming at him to stay out of the market…
Matt, you don’t have to keep saying this a million times. We all heard it the first time, and we all know P/E is distorted during crash periods, you just keep going in circles not learning anything. The fact is those analyst earnings forecasts are garbage, they have been for years, even the retail investors over at SeekingAlpha know that.
I’ll be the one with cash when it crashes, you’ll still be naked long waiting for those fantasy earnings.
Cramer is an animated guy who seems to do his homework and did have a good performing fund for a while. My working hypothesis has been that forecasting macro events is impossible and that the way to do it is focus on finding micro assets misvalued that should perform well in a variety of macro settings. The World just seems too noisy, so interesting that’s your approach. And just because he uses pe doesn’t mean he doesn’t know the flaws and when not to use it. Seems like you’re arguing that it’s not proper to build a rules based system on that, but pure never has struck me as overly dogmatic on any set of rules
this is not an answer to my question. i’ll stop asking when you answer. the fact you cannot answer this is why your indicator is a piece of $hit and useless.
here are your two potential answers:
i subjectively opt to use another indicator when my emotions push me to, allowing me to see the market as attractive at a market bottom, or
i don’t ever invest my cash anywhere near a market bottom and i’m a loser who buys high and sells low.
Do we forget about the fund he blew out? Down 98% I believe. Many sources reference it. He’s a blow hard. No way anyone can have a thoughtful opinion on every security. Turn him off. You’ll thank me.
Remember my point about abrasive posters? Easy to spot sometimes… Clearly I’m watching Cramer every night based on a funny comparison. Expert analysis lol Wish there was ignore functions on more forums. Although to be fair, you just seem like you’re in a bad mood lately. Normally you’re pleasant to read 