Want A Better View Of Next Year’s Profit Growth? Meet Average America Inc.

Paul Allison

about 2 months ago6:31 mins

Want A Better View Of Next Year’s Profit Growth? Meet Average America Inc.

US stock market valuations have fallen sharply in anticipation of a more difficult year ahead, and whether stock prices improve from here depends a lot on 2023’s profit picture. Top of your to-do list, then, should be forming a view on next year’s profit growth. Done the usual way, that can be an arduous task, so I've devised a novel way to do it…

First, here’s what conventional forecasting tells you.

One way to wrap your head around what’s going to happen next year is to pick off each company in the S&P 500, forecast each one’s prospects, and group all those forecasts together to get an aggregate picture of corporate America. (This is what’s known as a “bottom-up” approach to forecasting.)

But you’re busy, and I’m guessing you have neither the time nor the inclination for that. L

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