The Ignorant Investor

I've noticed that every article I reference on this blog is tied into the gloom and doom scenario for 2006, and there's always a danger of reading and absorbing only the evidence that supports your own prejudices and subconciously factoring out any evidence that runs counter to your view. Therefore in the spirit of forcing myself to look at the rosier aspect of the current situation, I'm presenting the following paragraph from a story that came over today's AP wire:

NEW YORK - Although Wall Street's reaction to fourth-quarter earnings reports has alternated between elation and despair, corporate profits remain very healthy overall, and the majority of corporations are beating expectations.

Of the 241 members of the Standard & Poor's 500 that reported earnings as of Friday morning, 155 companies, or 64 percent, surpassed Wall Street analysts' forecasts. Another 42 companies, or 17 percent of those reporting, matched estimates, while 44 companies, or 18 percent, had lower-than-expected earnings.

According to Thomson Financial, that's well above than the S&P 500's long-term average of 59 percent better-than-expected earnings. Profit growth remained strong, with the average company posting 13.2 percent year-over-year gains, Thomson said.

Okay. Now it's in the record. Look at this news story. LOOK AT IT. Accept it and ask yourself whether it changes your thinking about the market in 2006. If after reading it, you're sticking with your views- so be it. At least you looked at the other side's argument. So what we know now is that at least on average, companies are doing what Wall Street expects when it comes to earnings. No small accomplishment when Wall Street prices in double digit earnings growth into their models year after year.

So that's the positive side of the equation. I'll probably just ignore this information, but as least I know I shouldn't ignore it. For whatever that's worth.