Don Harrold’s video (thanks for the link) shows that only 1 out of 4 Dow stocks are above their 2000 prices, and the other 75% are actually in the red compared to 2000. Companies have been buying back stock and doing mergers, so what is the true earnings from operations? There is a lot of fudging with the expectations numbers too, as Fleck explains: companies will give lower guidance a few weeks before their earnings report comes out, and then provide the miraculous “beat-the-number”. This is engineered earnings. If you look at the expectations set at the last meeting, then how does it compare??
The most important indicator of the corporate health is the increase in profits from operations versus last year? That strips away earnings expectation manipulation, stock buybacks, and mergers. Let’s also take away options games.
Maybe you can explain this part, since you are following the stock market so closely. I am curious what is the true health of the companies, not just the spin they can get away with on managing expectations.
