S&P500 Operating Earnings Estimates

Runner Twentysix posted this recap today in our Bob Brinker Discussion Forum on Facebook.

S&P operating earnings estimates as posted by S&P for ‘08 and ’09.

Earnings continue their long running decline.

............ 2008………2009
8/7/2007...106.59 <-------2008 high …
01/14/2008.100.32
01/22/2008..99.21
01/29.2008….99.00
02/05/2008….99.86
02/12/2008….99.51
02/19/2008….98.99
02/26/2008….98.63
03/04/2008….96.55
03/11/2008….96.71
03/18/2008….96.42
03/25/2008….96.26
03/31/2008….96.74
04/10/2008….96.79……115.42
04/16/2009….93.62……113.30
04/22/2008….92.31……112.17

At Brinkers 16 to 17 times operating earnings, applying it to the S&P 4/22 estimate places the value for 2008 now at 1477 to 1569, and 2009 at 1795 to 19062. (FYI, the 2006 actual earnings were 87.72 and 2007 actual earnings were 82.54)

The ‘Word” is that Bob is projecting 1600 near the end of ’08 or into ’09. On 4/6/08, he stated on the show that he expected record highs near the end of ’08, which means 1565.15 on a closing basis, as Bob mentioned this number on his show.

Brinker said on Saturday April 5, 2008: “My number for the S&P 500 for 2008 is way below, way below the Wall Street number for 2008.” LOL, see Kirks comments "Bob Brinker's 2008 Operating Earnings Estimates"

Bob Norton's Evergreen was last reported at 85.00 for 2008, which would give a range of 1360 to 1445, which may be more realistic.

John Mauldin commented in "Outside the Box" that : "As if this wasn't bad enough, in the past we have shown that analysts tend to be around about 10% too optimistic in their year-ahead forecasts of the earnings level. However, in recession years this jumps to 30% too optimistic. "

See Normxxx’s interesting posting “The Real P/E Ratio”
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March Inflation Data Good News for TIPS and I-Bonds

I posted two articles worth reading. They are:

• Wednesday, April 16, 2008
  I-Bond Rates To Soar on High Inflation Data
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• Tuesday, April 15, 2008
  March Inflation Up on Higher Energy and Food Costs

Vanguard's TIPS index fund (VIPSX) was up 11.59% in 2007 and is up 4.74% YTD in anticipation of these high inflation readings. With inflation expected to moderate, I don't expect to see this level of performance continue.
Disclaimer: I have a fairly large position in TIPS in both my personal account and some of the newsletter porfolios in "The Retirement Advisor" investment letter. I also recommend TIPS as part of a 3-item alternative to the easy to track "Total Bond Fund" in "Kirk Lindstrom's Investment Newsletter" where I may again recommend iBonds with these attractive rates.
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Come join us to discuss "I Bonds or iBonds" in our facebook forum "Investing for the long term."