Australian Investment Blog

The Dow rally continues as 80% of corporate earnings beat expectations

Please don’t get the impression I am anti-economists, but I do feel a significant percentage of them are motivated by fear of being wrong, as opposed to striving to be correct. We are again experiencing this phenomenon with 80% of economists being too negative on US earnings. From an investor’s angle, this is great news if we look through all the forecasts, as it presents opportunities! Two quotes that are often banded around, in my opinion perfectly summarise what drives markets, especially around extremes:

Fear and Greed – The more negative people are, the more investors should consider buying - see chart 4.