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"Trump Bump," Corporate Earnings & Stock Buybacks

Episode 82

Updated: July 31, 2017

Our latest episode discusses the "Trump bump," which our analysts say was in the cards long before Trump. Plus, shouldn't corporate insiders avoid mistakes "Mom and Pop" investors make? Lastly, it might surprise you that earnings and prices sometimes go in opposite directions.

Show Notes:

Features in this episode:

  • Why Stocks Don't Take Orders from the President
  • Do Corporate Earnings Matter to the Stock Market?
  • Stock Buybacks: "Staggering Waste of Company Cash"

 

1973-1975 Earnings and Prices Go in Opposite Directions for Two Years
...in 1973-1974, earnings per share for S&P 500 companies soared for six quarters in a row, during which time the S&P suffered its largest decline since 1937-1942. This is not a small departure from the expected relationship; it is a history-making departure. ... Moreover, the S&P bottomed in early October 1974, and earnings per share then turned down for twelve straight months, just as the S&P turned up! -- February 2010 Elliott Wave Theorist

The S and P Has So Far Held Above Its Lower Channel Line on Log Scale and So Has the NASDAQ Comp
The January and February 2016 issues of The Elliott Wave Theorist, written as stocks were plunging in highly volatile fashion, called for a bottom and labeled the stock indexes as having finished A, B and C of wave (4), a corrective formation dating back to the high of 2015. -- February 2017 Elliott Wave Theorist

Corporate Investors Herd
Corporations buy back lots of stock near market tops and very little near market bottoms. If they did the opposite, they would thrive. They aren't rationally analyzing insider information; they're pre-rationally herding like all the other groups. -- Socionomic Theory of Finance

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Alexandra Lienhard is the host of the popular podcast Elliott Wave Weekly. She is also the Chief Correspondent for ElliottWaveTV, a channel dedicated to providing the latest information from key Elliott Wave Analysts. Alexandra has been working with Elliott Wave International since 2009. Before that she worked for CNN in their Atlanta headquarters and on their entertainment desk in Los Angeles. Alexandra graduated from the University of Southern California with degrees in Broadcast Journalism and Business.