Push It: Mike Wilson delays “earnings reset” call until Q2 2023
Push It
This is the strategist. The one who keeps pushing out his scary “earnings reset”.
As the S&P 500 started to unwind below 4,200 last year, on April 25th, Morgan Stanley’s Mike Wilson said that his “Fire and Ice” thing was playing out. He said:
“And that tells me we’re going into this final phase, which the good news, the silver lining…is that maybe we can finally complete this bear market over the next month or so,” “kind of clear the decks for us, we think, heading into the second half.”
But here’s the funny thing. Nine months later, no reset, no plunge to S&P 3,000. And since last April, Wilson’s been moving his “earnings reset” event further and further out.
Last April the strategist told us that earnings would reset in June 2022. But during the previous nine months, Wilson’s changed his story:
Last summer, he said September 2022
Then in the fall, he shifted to November 2022
In December, we heard Q1 2023
And just this week, he’s moved it into Q2 2023
Wilson and his team are sure that:
Wall Street’s 2023 S&P 500 earnings estimate is way too high
Everyone besides him and his crew are “woefully myopic” (yeah, they say that)
The S&P 500 will eventually discount his below consensus view, i.e., crash
I get it, things take time to play out. But Wilson’s “earnings reset” just isn’t happening.
Your relative performance vs. the broader market can suffer if:
you put too much weight on one person’s guess
you don’t know strategist track records, i.e., what they’ve said
I’ve spent years listening to these people, and they do have value, but you’ve got to understand what they’ve said. You have to listen in a certain way; then you can think ahead of strategists, and position ahead of other portfolio managers.
Don’t let one person affect your investing process or interrupt your regular cash deployment.
Wilson’s comments are everywhere. If your clients ask you about his latest interview, share these facts and give them some useful information.
Best,
Jim
