Sentiment is driven by the major shareholders and not those who listen to hairdressers or taxi drivers ....or even what's said on forums
The biggest shareholders are the ones who move the share price
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Sentiment is driven by the major shareholders and not those who listen to hairdressers or taxi drivers ....or even what's said on forums
The biggest shareholders are the ones who move the share price
And for many of our largest companies, those are offshore shareholders. So sentiment can change in a heartbeat, like when they think it's time to wade in and ride the wave and we're euphoric at our markets' resilience against internationals. Or when they think it's time to take profits and leave the hapless wondering whether to exit, or even where the exit is. Sentiment is everything, but only if one is concerned to manage capital invested. Otherwise, sentiment is just another blip in the bumpy journey to sustained earnings from reliable profitable company's. An intriguing conundrum, perhaps which makes the market what it is.
wall st close right on support - make or break tonight?
Alcoa has kicked off earnings season. As always - mixed and open to interpretation.
Analysts had estimated an EPS of 0.02 on revenue of 5.2 billion. Reported is an EPS of 0.07 on revenue of 4.95 billion (5.84 billion was the previous years). First-quarter earnings of $16 million from $195 million a year earlier.
SP for them today, started at $9.37, went as high as $9.92. Post earnings announcement down to $9.37 on low volume and sitting where it started the day....
Going to be an interesting week.
In the States from what I read, there is much less room on the high side as there is on the low side for stocks.
What will be interesting is when the Banks report.
This Wall St Rally has a poor reported season factored in...that sentiment for ya....eh!!
Percy...EPS is history.. Price is the present... here lies (pun) the problem....Research has shown Investors over-estimate earnings going forward during the later stages of a bull market cycle especially so near the top (exhuberance phase) and during stage 1 of the new bear market cycle...and... investors under-estimate EPS near the end of the bear market cycle and during stage 1 and the "wall of worry" early part of stage 2 of the bull market cycle..
Wall St may come unglued when "America,,the promised land doesn't deliver" and the forward EPS doesn't meet the expections..Actually forward earnings haven't reach their expectations since 2014...that is a sign of a cyclical top and the denial phase of stage 1 Bear cycle...
Same thing but more exaggerated with stocks that have cyclical tendencies...Mr Market is no slug...cyclical stocks are running at very low PE's and the Financial stocks e.g Banks are down around -30%....they are warnings folks..it may come to nothing and the stocks turn out to be great buys but the risk is very high..
An argument saying that the price will eventually rise up to meet its EPS value so we should buy more while the stock is under-valued is fraught with danger..EPS being history is a revision mirror..we don't drive our cars forward relying on that revision mirror..
Just llike to mention about the DOW chart...it's starting to look bloody ugly...indicators turning and today's gravestone doji doesn't help
And banks are an even more interesting example because they are so interconnected--New Zealand (and Australia) are still very dependent on the whole banking system.
Heartland may not be invested big in farming ,but low interest rates are much more of an issue--You just cant make the same money in a low interest Environment..-the spread is thinner.
Yep, the expectations for earnings season is poor - if they fail to meet those low expectations things could get ugly.
Great post Hoop, very well summed up
EPS.When you have 25 years of EPS history with a company such as Ebos,and they say they expect double digit growth you can safely assume it is going to be above 9%.
It is very easy to compare results with projections.
A lot of companies achieve what they say they will do.