We're at the beginning of the reporting season for Q4 of 2022. The bank's started it off with a mixed bag, but we have many companies still to report.
The markets are booming today, but the trend which began with reporting for Q3 of 2022 showed generally negative movements in earnings and revenues. We still have a negative slope on the yield curve and inflation, while easing a little, is still in the “clouds”.
We’ll likely to see more companies showing revenues flat to decreasing and earnings dipping as consumers and companies tighten up their purse strings.
We’re coming to the point where many of the “hopium” stocks, will start to “throw in the towel”. When there have been no earnings for their entire history and, then, revenues slow down, the losses grow deeper at a faster pace. Some will declare bankruptcy, as they can’t cut the right expenses fast enough to deal with dropping revenues. It reminds me of the old quip. “If you find yourself in a hole. Stop digging!”
The market is ahead of itself today. It is exciting to watch, but I’m keeping it that way for now – just watching!
Be smart, be well-read, be aware and be successful.
“Be fearful when others are greedy, and be greedy only when others are fearful.”
- Warren Buffett
