Wall Street Journal (May 13)
“Economist Burton Malkiel might have called the stock market ‘a random walk,’ but investors could at least use earnings guidance by companies as road signs. Now they are largely walking blind.” With on-again, off-again tariffs, “nobody knows what the economy will look like in a few months’ time.” Some companies are leaning heavily on assumptions. “Others, such as General Motors, PepsiCo and Procter & Gamble, have lowered targets, while Volkswagen excluded tariffs from its outlook. United Airlines, creatively, offered one scenario for a stable environment and another for a recession.” Other companies have simply thrown in the towel. “Ford, Jeep-owner Stellantis, Delta Air Lines, and UPS took another route, scrapping their 2025 guidance altogether.”
Tags: Assumptions, Blind, Delta Air Lines, Earnings guidance, Economist, Economy, Ford, GM, Investors, Malkiel, Outlook, PepsiCo, Procter & Gamble, Random walk, Recession, Scenario, Stable, Stellantis, Stock market, Targets, Tariffs, United Airlines, Volkswagen
Wall Street Journal (August 8)
The sky is not falling according to Burton G. Malkiel, a former Princeton professor and author of “A Random Walk Down Wall Street.” In the U.S., “the headwinds restraining the economy are many” and further complications arise because “Europe has not really fixed its economic problems.” Still, Malkiel doesn’t believe this is a good time to sell. Valuations are likely to climb in the future. Stocks are currently cheap in terms of P/E ratios and the results of many U.S. corporations are driven less by what happens in Japan, Europe and the U.S., than by sales in emerging markets. “My advice for investors is to stay the course.”
