It's been a pretty wild week on the stock market. I haven't made any trades, and have been very impressed by my lack of concern on the bad days this week, when my loses were in excess of $20,000. For me, as long as the earnings estimates stay on track, I don't mind if the daily stock price fluctuates. Which leads me to a question that I have not found any answer to yet on the Internet.
Just how much Can you trust analyst earnings estimates?
I can imagine that the analysts have more training an resources than I do, so they must be able to fairly accurately predict future earnings and hence the inherent value of today's trading value. Or do they?
When I see that "14 analysts have a consensus earnings estimate of $0.25 per share" how do I know that this can be relied upon as a fairly good indicator? What if 10 of the estimates are at least 6 weeks old and the other 4 analysts are ready to be sacked for poor performance?
Is there a ratings agency for analyst estimates? I can't find any indication on my internet searches that this is the case. I also can't even easily find out which analysts made what estmate at what time. It doesn't exist anywhere. Even this simple info would add a lot of value to understand what "consensus estimate" really means.
I will keep looking on the internet for better info on these "consensus estimates" but if anyone can shed some light on this, I would appreciate it!
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