The term talking down has different meanings to different people. If you talk down an opponent it can come back to haunt you. If you manage a big corporation it can put big bucks in your coffer.
As most investors are aware 'tis the season for earnings reports. On a basically dull day yesterday investors took what the market gave them--individual company earnings reports for the second quarter.
Of stocks in the S&P 500, according to a WSJ report, earnings are expected to register a little over 1% gain over the same period in 2012, a number that is well below what analysts had predicted in March. How much below? Try 1.1% versus 4.3%.
Back in the tech heydays of early 2000 one major S&P 500 darling beat management's projected earning by one penny for 14 straight quarters. Investors ate it up, pushing the stock price ever higher. It was a great gig if you were Wall Street connected. Names like Henry Blodget should come to mind here.
Managements sell more than just their main service or product. Call it reverse psychology or whatever. In the business it's known as talking down earnings expectations so you can surprise to the upside.
Truth be told, absent financial companies, corporate earnings would otherwise be negative.
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