A report on CNN Money today shows a 2.7% decline in retail sales in December which is larger than expected according to the story.
If this is accurate based on analyst expectations, I think they should also write a story about how analysts should get their heads out of their asses and pay attention to what is going on in the economy, because every time they get it wrong, my 401k shrinks another 10%. My advice to stock analysts is to take your assumptions and projections and realize that in a recession, you are a very large part of consumer and investor confidence.
Confidence is an intangible thing influenced by many factors, the most important of which may be what some egghead with a slide rule has to say about trends and durable goods orders.
Someone in that job who thinks, “I just report the facts,” in relation to projecting performance should read every broker’s disclaimer: Historical data is not an indication of future performance. So when I hear 2.7% down, while that may be more than expected, is probably less than it could be and the more we whine about not meeting expectations, the lower the market is going to trend.
My advice: take your projections and revise them downward, so that when the data is better than your expectations, we can look at that as positive news, and maybe, just maybe some of that good news will rub off on that tricky economic factor called “confidence.”
My response to a 3% decline? “I thought we’d be down at least 5% in this recession.” And suddenly we have GOOD news instead of bad. See how easy that is?