Hartzman Tax & Fiduciary: The Russell 2000 and earnings estimates

12/13/24

The Russell 2000 and earnings estimates

The Russell 2000 Index is comprised of the smallest 2000 companies in the Russell 3000 Index, representing approximately 8% of the Russell 3000 total market capitalization.

@MichaelMOTTCM

The graph shows a clear disconnect between the price action of the Russell 2000 Index and the earnings estimates for 2024 and 2025.

The earnings estimates for 2024 and 2025 are significantly lower than the index price would suggest, without significant improvement in earnings for the companies over the next few years.

Speculative or momentum-driven trading is outpacing underlying fundamentals.

Valuation levels are not justified by the earnings outlooks.

Just a part of the everything bubble.

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