Earnings Estimates

[ChrisZXWJ]

why can't you answer the question? An explantion of "analysis" doesn't cut it with me. As I said to you on AIM, a stock that underperforms any target suffers a decline in the price. Every stock I was able to look up, granted I only had 4 writeups available to me, underperformed your target. So since you can't diginify me with a response on AIM, how about one here infront of all of your "peers"?


And, I would be more than happy to compare the numbers you gave in the old writeups to the reported numbers, provided you or someone else would like to give me the old writeups.

So far, all I can see is that you pick a number out of a hat...and that doesn't do any of us much good.

[Karel]

... a stock that underperforms any target suffers a decline in the price. ...

I don't think I'll buy that one. Any target is too vague. The market will hardly react when a stock misses a target estimated/calculated/fantasized by the Huge One. It is when a stock misses the consensus target of the analysts that the herd, aka as the market, starts to panic.

I think it might be problematic to resolve this issue now with such old stocks, because Ernie's calculations might have been made on the back of an envelope, because the consensus estimates might be difficult to dig up, and because this discussion is starting to sound a bit strained.

Why not wait for the next pick, see whether there is a significant difference between $$$MrMarket$$$'s estimate and the consensus estimate, and then ask why?

Just an idea, of course.

Regards,

Karel

[mrmarket]

why can't you answer the question? An explantion of "analysis" doesn't cut it with me. As I said to you on AIM, a stock that underperforms any target suffers a decline in the price. Every stock I was able to look up, granted I only had 4 writeups available to me, underperformed your target. So since you can't diginify me with a response on AIM, how about one here infront of all of your "peers"?


And, I would be more than happy to compare the numbers you gave in the old writeups to the reported numbers, provided you or someone else would like to give me the old writeups.

So far, all I can see is that you pick a number out of a hat...and that doesn't do any of us much good.

All of the old writeups were pulled by Jiesen on this thread. Since you are the one trying to make a point, I suggest that you should be the one doing the data mining to see how your hypothesis fares. Then we can have an intelligent discussion.

I don't see why the burden of proof should be placed on me.

[ChrisZXWJ]

why can't you answer the question? An explantion of "analysis" doesn't cut it with me. As I said to you on AIM, a stock that underperforms any target suffers a decline in the price. Every stock I was able to look up, granted I only had 4 writeups available to me, underperformed your target. So since you can't diginify me with a response on AIM, how about one here infront of all of your "peers"?


And, I would be more than happy to compare the numbers you gave in the old writeups to the reported numbers, provided you or someone else would like to give me the old writeups.

So far, all I can see is that you pick a number out of a hat...and that doesn't do any of us much good.

All of the old writeups were pulled by Jiesen on this thread. Since you are the one trying to make a point, I suggest that you should be the one doing the data mining to see how your hypothesis fares. Then we can have an intelligent discussion.

I don't see why the burden of proof should be placed on me.

Why shouldn't the burden of proof be placed on you? You're the one who can't dignify me with a decent answer. This was supposed to a simple question but your ignorance is honestly starting to piss me off. How am I supposed to test my hypothesis on your picks for late 2003/early 2004 when the numbers aren't yet reported for 2004 and even farther out into 2005? Don't be foolish.

[Jaws57]

ChrisZXWJ

I have been following MrMarket for about 2 years since yahoo board. All I can say is who gives a sh*& about his earnings accuracy, me I dont track his earnings forcast %. What I do however is track PREFORMANCE!!!!!!!!! on the PRICE of the stock. It usually goes up,up, up!!!.
I have made good money on MrMarkets picks and will continue to listen to what he says. Im not saying blindly follow everything he does(I dont since I carry only 6 MM stocks at a time), but give the man his due.

Hey 56-0. even if you count the current port as all losers that would leave
a 56-14 record, pretty damn awesome!!!!. Actually I would say 4 might not make it so now we are at 66-4. Can you match that!!!!!!!!

you YOU YOU!!!!!!!!

Jaws57

[Karel]

Why shouldn't the burden of proof be placed on you? You're the one who can't dignify me with a decent answer. This was supposed to a simple question but your ignorance is honestly starting to piss me off. How am I supposed to test my hypothesis on your picks for late 2003/early 2004 when the numbers aren't yet reported for 2004 and even farther out into 2005? Don't be foolish.

Well, perhaps you could outline your hypothesis and show why the earnings calculations, as opposed to or in conjunction with the results of these calculations are necessary to test it. I mean, the heck with burdens of proof, why don't you step up and say what you think/suspect, how you want to test your ideas, and what you need to do it? I might even get interested.

Regards,

Karel

[mrmarket]

I honestly don't know what it is Chris is looking for. If he is looking for a lesson on how one calculates earnings projections, I would direct him to any basic finance and accounting curriculum. I'm not sure about any other way to do it.

[mrmarket]

Why shouldn't the burden of proof be placed on you? You're the one who can't dignify me with a decent answer. This was supposed to a simple question but your ignorance is honestly starting to piss me off. How am I supposed to test my hypothesis on your picks for late 2003/early 2004 when the numbers aren't yet reported for 2004 and even farther out into 2005? Don't be foolish.

May I suggest that if this message board causes you to evoke negative emotions, maybe it is best you refrain from reading the text that causes you such unhappiness.

[ChrisZXWJ]

I honestly don't know what it is Chris is looking for. If he is looking for a lesson on how one calculates earnings projections, I would direct him to any basic finance and accounting curriculum. I'm not sure about any other way to do it.

I've completed a Finance BS, half way through a finance MBA, passed Level I of the CFA exam, taking Level II in a week and also thinking about sitting for the PRM exam later this summer. I think I've got a pretty good grasp on how to calculate earnings, it's just your earnings that I'm having a problem calculating. So, maybe you could explain?

[ChrisZXWJ]

Why shouldn't the burden of proof be placed on you? You're the one who can't dignify me with a decent answer. This was supposed to a simple question but your ignorance is honestly starting to piss me off. How am I supposed to test my hypothesis on your picks for late 2003/early 2004 when the numbers aren't yet reported for 2004 and even farther out into 2005? Don't be foolish.

Well, perhaps you could outline your hypothesis and show why the earnings calculations, as opposed to or in conjunction with the results of these calculations are necessary to test it. I mean, the heck with burdens of proof, why don't you step up and say what you think/suspect, how you want to test your ideas, and what you need to do it? I might even get interested.

Regards,

Karel

Karel,

I'm not quite sure I follow what you're saying. Simply put, I'd like to know why Mr. Market's earnings calculations are so far off from analyst estimates. I have no idea how he calculates them, and I was hoping for an explanation, which I have yet to recieve.

By saying earlier that the market will dump a stock that misses an earnings target, I was stating that with the underlying assumption that Mr Market's target would be the actual market target. So in a sense, all of his numbers have missed, and the stock performance would have suffered.

And to test my theory of him being very far off with earnings estimates, I'd need the old writeups, from 2001, 2002, 2003, etc, and not just the old ones on this board, they're too current to do much about. I can't test anything until I get the reported numbers, and currently that won't be for months. Once the numbers are completed, a simple % error could be calculated. I was going to attach a little Excel file I made last night of jiesen's post, yet to be completed obviously, but the forum won't let me. I'll e-mail it to you if you'd like, maybe it'll spark some interest on your side

To respond to Jaw's comments about his performace, I have nothing bad to say about that. I've made some good money off of a few of his picks. I just don't feel that the honest justification for buying one of these stocks lies in earnings projections as preached all along, it appears to me it's more of a component of momentum analysis. Granted, there's nothing wrong with that and I've again made more money buying solely based on momentum. I just don't appreciate misleading writeups that disguise the true reason for recommending the stock.

[mrmarket]

I honestly don't know what it is Chris is looking for. If he is looking for a lesson on how one calculates earnings projections, I would direct him to any basic finance and accounting curriculum. I'm not sure about any other way to do it.

I've completed a Finance BS, half way through a finance MBA, passed Level I of the CFA exam, taking Level II in a week and also thinking about sitting for the PRM exam later this summer. I think I've got a pretty good grasp on how to calculate earnings, it's just your earnings that I'm having a problem calculating. So, maybe you could explain?

Maybe you could explain why all analysts come up with a unique earnings projection. When you do your calculations, almost all of them are based on certain macroeconomic assumptions, business model interpretations, competitive growth assessments, demographic derivatives, and cost inputs. No two analysts are going to have the same assumptions. So no two analysts are going to have the same earnings projections.

Naturally, the stocks I analyze and eventually purchase are going to have earnings projections, based on my analysis, greater than that of the analysts that are publicly covering the stock. If my earnings projections were lower than that of the analysts covering the stock, I certainly wouldn't buy that stock! Why is this so difficult for you to understand?

[Karel]

Karel,

I'm not quite sure I follow what you're saying. Simply put, I'd like to know why Mr. Market's earnings calculations are so far off from analyst estimates. I have no idea how he calculates them, and I was hoping for an explanation, which I have yet to recieve.

By saying earlier that the market will dump a stock that misses an earnings target, I was stating that with the underlying assumption that Mr Market's target would be the actual market target. So in a sense, all of his numbers have missed, and the stock performance would have suffered.

[...]

Hi Chris,

Well, that was about it. I think this discussion may be partly so confusing because you seem to be after two different things.
1. The way $$$Mr.Market$$$ calculated earnings.
2. The effect of missing a $$$Mr.Market$$$ earnings estimate.

Combined, they may cause more confusion than necessary.
re 1): I repeat that the best way to check this out is to ask Ernie whether he wants to disclose the details of his calculations, and to check these with each new pick where the Huge One differs (markedly) from the consensus estimate (or from the results of your own calculations).

re 2): This doesn't need 1), and might be a fruitless kind of research. But it is your time and effort. I don't expect a $$$Mr.Market$$$ earnings estimate to be the consensus estimate. The consensus estimate itself is the average of the public analyst estimates. I would expect the $$$Mr.Market$$$ earnings estimate to be at the high end of the consensus range, or even outside that range (as Ernie seems to indicate in his message). And if the market doesn't know about it, it can't influence the market.

Regards,

Karel

[ChrisZXWJ]

Combined, they may cause more confusion than necessary.
re 1): I repeat that the best way to check this out is to ask Ernie whether he wants to disclose the details of his calculations, and to check these with each new pick where the Huge One differs (markedly) from the consensus estimate (or from the results of your own calculations).

This exactly what I want, but have yet to recieve.

[ChrisZXWJ]

Maybe you could explain why all analysts come up with a unique earnings projection. When you do your calculations, almost all of them are based on certain macroeconomic assumptions, business model interpretations, competitive growth assessments, demographic derivatives, and cost inputs. No two analysts are going to have the same assumptions. So no two analysts are going to have the same earnings projections.

Exactly, all I was asking was for a more elaborate disclosure of your prediction methods. That's all, nothing more, nothing less. Maybe in your next writeup, you could go into a more detailed explanation of your methods for achieving whatever EPS number you find.

[mrmarket]

Maybe you could explain why all analysts come up with a unique earnings projection. When you do your calculations, almost all of them are based on certain macroeconomic assumptions, business model interpretations, competitive growth assessments, demographic derivatives, and cost inputs. No two analysts are going to have the same assumptions. So no two analysts are going to have the same earnings projections.

Exactly, all I was asking was for a more elaborate disclosure of your prediction methods. That's all, nothing more, nothing less. Maybe in your next writeup, you could go into a more detailed explanation of your methods for achieving whatever EPS number you find.

It's an Excel spreadsheet, no different from the ones you see on any analyst's report....revenues, cost of goods sold, depreciation, taxes, etc.

I think the readers would rather see funny pictures and good anecdotes. The needs of the many outweigh the needs of the few, or the one.