Prepping for a Bumpy Earnings Season By Tim Melvin About this article: Here we go. Time to pull that chin strap tight and get ready for the game. Earnings season begins in full force today, and I suspect it is going to get bumpy. In the second quarter, at Wall Street's urging, investors accepted the premise that less bad is good. The typical knee-jerk response of analysts had been to ratchet earnings expectations as far down as they could, and many companies exceeded those reduced hopes. Everyone ignored the fact that the earnings were achieved by cutbacks and cost controls. In other words, they eked out a profit by laying off people. Of course, Wall Street responded by raising their expectations for this quarter. This time around we need to see top-line growth to justify the expectations of investors. We are already trading at 20 times the expected earnings. I have seen some astute observers justify market prices by... Or, call us at 1-866-321-TSCM (8726) Monday-Friday, 8 a.m.-6 p.m. ET. Outside the U.S. and in Canada, call 1-212-321-5200. More Stories From RealMoney Durable Goods Up Move Down the Tech Food Chain Jobless Claims Still High Bulls' Tenacity Is the Big Question Mark Should You Buy It? Pharmaceutical Product Development Bad News Trumps All Support for Banks Holds, For Now Bummer, Yields Are on the Rise Money on the Line Makes a Big Difference Structured Products: Unsafe at Any Price MORE STORIES FROM REALMONEY

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