Bill Rempel, a.k.a. NO DooDahs!

Bears will be mentioning S&P 500 earnings ex-big oil. Bulls will be mentioning S&P 500 earnings ex-financials. Both are full of shit, some particular ones more so than others.

Here’s the bucket of shit that they’re selling you. The Bears don’t go back and compare those historical earnings series, leaving out whatever was “hot” at the time, say Tech one decade, Utilities another decade, etc. No, they just leave out today’s “hot” earnings grower and try to make the average retail schlump scared crapless, because scaring people drives traffic. Flip the argument for the Bulls’ leaving out historical comparisons of S&P 500 earnings leaving out the shortfallers.

People who are really interested in S&P 500 earnings trends (I’m not, BTW, one can do just fine in the markets without such effluvia), with a view towards eliminating the outliers, will use a concept called the “trimmed mean.” They would eliminate both the leading and lagging industries and look at the earnings trends of the vast majority of companies in the middle.

Of course, one could argue that, since at any given time there are companies and industries with growing profits and companies and industries with shrinking profits, that the whole endeavor of examining S&P 500 Earnings Ex-What? is pointless and idiotic. I would tend to be among that group.

If you liked this post, you might be interested in subscribing to my RSS feed. If you prefer, you can get a nightly RSS email update sent on the days that I post! There are convenient “Subscription” icons near the top of the right sidebar.

To view my actual trades and model portfolios for the different systems I track, visit The Rempel Report. If you’d like to become of member of The Rempel Report, you can register here. At The Rempel Report, I track model portfolios for four different mechanical trading systems, disclosing all results (good and bad) at regular intervals. I also track my personal portfolio, and disclose all trades before I make them. Members receive email notification of new posts and can contribute to the site through comments. Registration is still free!