Steroid Era With Spencer Jakab, the F***’s Going on With Strategy?, Margin Debt
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What earnings forecasts are entering a 'steroid era'?
Michael, the chat is booming right now, I have to say. So is the stock market. Yeah, all the gangsters are here. There's a lot going on. Oh, thanks for all the Nike updates, guys. I appreciate it. I don't know what's going on. Don't be salty. This is the life we chose. Yeah, imagine it was up 4%. I would be insufferable right now.
That's true.
All right. We're going to get to Nike later in the show. I want to say a quick couple of hellos to the chat. A lot of our OGs are here. Matt Stevik in the house. C. Paul Breezy. What up? Just Dave is here. Have you seen Michael Jordan lately? He's gained a few pounds. I think he's earned that, Dave, to be honest. Georgie D says squawking friends. Okay. Not sure where we're going with that. Shapiro, full-time pounder. We appreciate you, brother. Thanks for being here. All right, and everyone, I don't get a chance to say hi to. I see you. I'm thrilled to have you here. All right, one more. Jackie Jimrat is back from the greatest city on earth, Philadelphia. Debatable, Jackie, but we love you. Thank you for being here.
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Thank you to the folks at IMGP. We appreciate you. All right, so we're going to talk about earnings, which obviously is the main story in the market this year. It's a bonanza. Earnings growth is significantly better than economic growth. Earnings growth is the reason why we are where we are in the market. We are not getting here. Thanks. Oh, who? The what? Who could that be? Dad? Oh, my God. It's Spencer Jacob from The Wall Street Journal, ladies and gentlemen. What brings you to the neighborhood tonight?
I thought I'd So I jumped into the discussion.
You overheard us talking about earnings growth and you decided to come by. Well, we appreciate it. It's you know, it's such a coincidence that you're here because we were literally about to talk about your excellent piece in your newsletter for The Wall Street Journal this morning. It's just like one of those serendipitous things. It's hard to explain even so weird. All right. We're super happy.
We're both on the call. Thank you.
We're super happy to hear. Spencer, I want to quote you and then I want you to react to it. You did this really, as I mentioned, really good piece about the earnings growth this year. And your title was earnings forecasts are on steroids. And it's clever, it's a good way of thinking about it. I think it's exactly right. There are a lot of asterisks to what's happening to produce the sort of earnings growth that we're getting this year. And then this is exactly what you said. The first clue about how unusually profitable the quarter has been is that analysts raised their earnings per share forecast for the S&P 500 by 3.4% since the end of March. And you note, analysts typically lower their earnings expectations during the quarter, which that's how we get all these surprises in the next quarter.
But the average reduction has been 2.7% over the last 40 quarters. Okay, so right off the bat, this is a very unusual situation where we're actually raising the ante in the midst of the quarter itself.
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Chapters
7 chapters
1
What earnings forecasts are entering a 'steroid era'?
0:02–10:33
2
How is the bull market rally broadening beyond mega-cap tech?
10:33–17:41
3
What are the systemic risks associated with Bitcoin investments?
17:41–25:24
4
How is excessive speculation impacting leveraged markets?
25:24–29:42
5
Why are some software stocks emerging as AI winners?
29:42–44:33
6
What is the significance of Toast in the current market?
44:33–54:25
7
How does margin debt relate to market speculation?
54:25–1:04:42
Speakers
5 identifiedMore from The Compound and Friends
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