Have you ever noticed how 'sanguine' and 'sanguinary' have the same Latin root, sanguineus, but mean such different things?
The first is defined as "optimistic or positive, esp. in an apparently bad or difficult situation" whereas the latter is "involving or causing much bloodshed".
See also: "Delusional analyst".
Anyhoo.
Here's a guy who's not delusional and a keeper of the link to the Cowles Commission database to boot, Political Calculations:
Lots of analysts spend a lot of time trying to determine what the future expectations are for future earnings that investors have as they make investment decisions today as they set stock prices. For us, we already know what investors expect for what future earnings (or really, dividends) that they can reasonably expect to earn in each of the future quarters through the end of 2014, but the real challenge is determining how far in the future they're looking, because the expectations for just one of these future quarters will be the primary driver for stock prices.
To that end, we're going to re-do our previous "what-if" exercise from last week, where we only presented how stock prices might reasonably behave during the month of February if investors maintained their focus on 2013-Q2 in setting their expectations, to also show what a focus on either 2014-Q3 or 2014-Q4 would mean for the S&P 500.
Welcome to our world, where we're always working in one of several alternative futures....
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