Dueling investing apps: How to best forecast earnings

P2P Lending's Developing Debt Market

In investing, earnings drive stock prices. The thing is, though, for many higher growth firms, it’s really hard to determine just how likely a firm is to hit its stated targets.

An earnings miss — or even a hint of one – can be disastrous to share prices.

So, investors spend a lot of time listening to this analyst and that pundit explain his expectations for earnings.

The truth is, very few of these guys get it right.

A better way to get earnings estimates: crowdsource ’em

Most of the time we use analyst consensus earnings — an average of all the different Wall Street opinions.

The problem with using an average is that earnings estimates on certain stocks diverge pretty significantly and taking the average isn’t an entirely accurate way of trying to gauge earnings.

There are a couple of ways to do this better/smarter right now.

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Creating valuable mashups of investment research – with James Berman

Professor James Berman has taken a new investing research platform (Trefis) and made it even more valuable.

His new investment advisory newsletter, the Berman Value Folio, integrates interactive modeling tools to create what I think is one of the first mashups of next generation investment research.

James is our guest this week on Tradestreaming Radio to talk about the investment research process, the next generation of research tools (including Trefis), and how he’s created his investment product.

Listen to the FULL episode

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Video Review: Trefis

Trefis.com is a great site to model up technology companies. There are some great tools — some analytical, some social, that allow investors to play around with growth/profitability assumptions to forecast a stock price.