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July 2, 2011

Earnings “surprises” should be ignore.

Jason Zweig’s June 2nd article in the Wall Street Journal discusses why “there isn’t anything surprising about earning surprises.  There is “no reliable evidence that  the stock market as a whole will earn higher returns after periods with more positive surprises.”  Earning forecasts are gamed, that is the earning surprise is “a staged event.
This is another argument why market strategists, TV commentators and other investment pundits should be ignore. 
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