SipSizzurpFo' ShizzlePremium
join:2005-12-28
Houston, TX
kudos:3 | Fuzzy Math ? »www.ft.com/cms/s/0/64770816-6398···J9oWwHqK
quote:
Earnings per share for companies in the S&P 500 index grew 41 per cent in 2010 following a sharp slowdown in 2009, according to Thomson Reuters, but are forecast to grow just 13.6 per cent in the first quarter compared with the same period a year ago.
Let's see here. We had a 41% growth in the S&P 500 last year. A quarter's worth of the 41% annual growth rate is one fourth, right ? So the first quarter's grown last year was 41 divided by 4, or 10.25%, yes ?
By comparison, this year's first quarter forecast is for 13.6% which would be an improvement of 3.35%, yet the article implies that due to higher commodity prices, we are not doing as well. Somebody seems to be confuzed.
Would it perhaps behoove us all to just ignore all the "news" and simply wait for armaggeddon to take us by complete surprise ?
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I spent most of my money on Women and Beer, and the rest I just wasted ! |
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 VoxxjinCool Blue TrollPremium
join:2010-01-13
San Antonio, TX
 ·Time Warner Cable
| You are assuming that the growth rate was constant over the whole year. Perhaps the first quarter only grew by, say, 5%. Maybe the 2nd quarter grew by 10%, the third 12% and the fourth by 14%. If the first quarter of this year is 13% better than last year then it would have a growth rate of about 5.6% which is sharply lower than the fourth quarter of 2010 (14%). So while better than last year's first quarter it is much worse than last quarter.
All number were made up by me as an example (I didn't read the article).
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Cry "Havoc!" and let slip the dogs of war |
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| reply to SipSizzurp
In recent years I've watched my stocks be negative Q1, Q2, & Q3 only to rise 30-40% in Q4 for an annual return of like 12-18%.
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"Rule No.1: Never lose money. Rule No.2: Never forget rule No.1." -Warren Buffett |
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