Bob Brinker Stock Market Targets

This article compares Bob Brinker's S&P 500 earnings estimates for 2018 and 2019 with those of one of my favorite economists, Dr. Ed Yardeni. 

In almost every Marketimer Newsletter, editor Bob Brinker publishes his earnings estimate for the S&P 500, his estimate for a reasonable price to earnings (PE) ratio range, then a reasonable "potential" price for the S&P 500 index usually calculated by multiplying the two numbers then applying some spit-shine.

Brinker currently estimates the market "has the potential" to reach $2900 when it starts to discount 2019 earnings of $163 with a PE ratio of 17 to 18.  As my table below shows, this is about the highest PE ratio Brinker has thought acceptable since 2008 based on the Marketimer newsletters I surveyed to make the table below.

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Of course, you need to take this numerology with large grains of salt.  For example, ten years ago the market was at $1331 and about to crash to $666 while Brinker predicted new highs into the "$1600s range" as I highlight in this table.

I'll try to provide regular updates of that table here because it has some interesting calculations and it provides a good historical record.

 Here is an example from his May 3, 2017 Marketimer how he frames the data with words.

From over 20 years of following Brinker, I've noticed he usually starts his S&P 500 earnings estimates lower than the consensus of the average of most analysts tracked by tracking services. Then if the year goes well, Brinker raises his estimates such that by the end of the year they are close to consensus.  This also allows him to raise his estimates for the market price before it moves "closer to the period when investors will discount" the next year's earnings estimates.   

Dr. Ed Yardeni's Estimates: This is what one of my favorite economists, Dr. Ed Yardeni, publishes.

Note how Dr. Yardeni also has a below consensus forecast for 2018 and 2019 S&P 500 earnings of $155 and 166, respectively.

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Dr. Ed Yardeni is a regular guest on CNBC, the financial show that runs from "Squawk Box" starting at 3 AM PST to Jim Cramer's "Mad Money" ending at 4 PM PST.  See www.yardeni.com for more information about Dr. Ed.