Friday, February 20, 2015
US earnings recession looms
The consensus forward view of large US companies earnings aren't raising any hopes at all. I was poring over this chart this morning and moments later was reading how Walmart plan to raise the wages of 500,000 of its workers from now till next year and the estimated hit it will take on their earnings. Many big companies will be acting like Walmart. In fact some have already done that. Together with the strengthening USD this is packing quite a punch and all of these corporations have a large external wing. Consensus was looking for Fed rate hikes this year but for months I have been quietly talking to those around me that this is not going to happen but you don't blog about such things until it has become obvious. Once you put out something like this publicly it has a stealthy way of affecting your thinking, which is never good.
Update: 8:15 pm
Here is Good Ol' Buffett as reported in a Washington Post article. Recently he have had some bad runs with Exxon as the latest but IBM calling for patience and so he bought more.
To me, an investor should not talk too much about investing to others except privately among those in their community. Leave the talking to the Sell Side, which you mustn't pay too much attention to in the first place. Those who talked too much have often suffered from poorer performance.
Ray Dalio is getting on in years and I sense he also is less interested in money and talking more. Time will tell if he also suffer from this talking curse.
Posted by PengYou at 3:00 PM