Earnings Expectations

It is earnings reporting time in India and I am sure- in the US too. Most large companies should report in this week and next. One can say with a probability of 1 that the earnings reported will be significantly different than that expected by analysts-(they hardly ever get it right) but I am more interested in the probability that earnings will be better than expected. Even that probability should be in the high 70s because most analysts will be slow in increasing earning numbers after the horrible pounding in 2008. So most companies will beat estimates and that could lead to another pop in the market.

I am amazed at my own deep analysis and understanding of the analysts psyche. I freely admit that reaching this level of understanding is not easy and takes effort. One of the things I did to reach this level of ability was to stare out of my window at Powai every day for 5 minutes in the morning. While to the ordinary onlooker it would seem like I was doing nothing, I was in reality in deep contemplation. In a previous note I have mentioned how this process helped me discover the Shanghai Syndrome and the Law that Governs it. I highly recommend this process to any committed student of the market!!!

After this do I need to say anything else? Let me just say that Nifty remains a buy, most indices are in a BUY mode and almost all commodities are also in a BUY mode. The Dollar Index is trended down. I will continue to remain long on the Nifty until it breaks below 4900.