S&P 500 full year earnings went from $82.50 in 2007 to $49.49 in 2008, a jaw-dropping 40 percent decline.
The comeback began in 2009, with earnings of $61.70 (25 percent gain), continued in 2010 with earnings of $85.34 (38 percent gain), then again in 2011 with estimated earnings of $95.59 (12 percent gain).
For 2012, the estimates are for earnings of $103.76, a gain of 8.5 percent.
Sounds like a real slowdown, no? But wait: the average yearly gain for the S&P 500 is 7.2 percent since 2000. See? Mean reversion.
What about quarterly growth? The historic average for quarterly earnings growth since 2000 has been 8.8 percent. Quarterly growth in Q4 will be about 7.4 percent, and may slow down a bit more in Q1 2012. More mean reversion.
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