Earnings, Earnings and more Earnings
Corporate earnings for the past quarter and year are now being reported. So far, they look excellent. Certainly, recent results along with announced outlooks from many CEO’s do not point to a major downturn or recession. Investor angst has been overblown. There is recognition that earnings will not continue to grow at last year’s rate. Those were propelled by the benefits of a lower corporate tax rate and is a one-off. However, earning levels are not going to fall and are continuing to grow at good rates.
As a result of this higher level of earnings and the recent correction, valuations for many companies are even more attractive. Dividend rates for some stocks offer excellent cash flow returns too. In short, stocks are on sale and a true investor’s delight.
Buying right is always a key to long-term success. Of course, there may be some disappointments in the earnings of a few companies. We make adjustment where necessary, but in general, we are pleased with what we are seeing. Stay steady, my friends.
The Lonely Bull