A Negative Earnings Revision Is No Reason To Sell Stocks

See Also Wall Street's analysts have a very long and consistent track record of overestimating the future earnings of the companies they cover. Because of this well-known record, markets have gotten used to negative earnings revisions. In other words, this specific type of bad news is generally priced into the markets and is not a good reason to sell stocks. Estimates for 2014 are already tumbling. "The above-noted S&P 500 2014 EPS estimate downgrades are in fact no worse than in-line with the long-term (post-1987) "average annual earnings estimate revision trend" -- i.e. estimates typically "start high" and are whittled down over time -- which itself implies roughly another 7.5%...