And that's the risk now that's left in the market in my opinion that could take it much, much lower is if that, you know, all of this slowdown really contracts spend and the earnings are actually not accurate. The forecasted earnings will need to be revised over the next 2 or 3 quarters. And that's where we will probably see the low.View on YouTube
Chamath’s conditional prediction was that if a macro slowdown forced meaningful downward revisions to corporate earnings forecasts, then U.S. equity markets would likely make their cycle low around the time those revisions occurred, within roughly 2–3 quarters of May 2022 (i.e., by about Q1 2023).
1. Macro slowdown and earnings forecast cuts in the next 2–3 quarters
• The U.S. economy experienced a clear slowdown in 2022: real GDP contracted at an annualized –1.6% in Q1 2022 and –0.9% in Q2 2022, meeting the common “technical recession” definition and widely described as a technical recession. (cnbc.com)
• By late 2022, analysts were sharply cutting forward S&P 500 earnings estimates. A Bank of America note in early November 2022 described a “complete U‑turn” in 2023 EPS estimates: 2023 EPS for the S&P 500 was down 3.6% just since the start of October and about 8% below its June 2022 peak, with forward estimates “cut much larger than usual.” (equity-insider.com)
• Goldman Sachs similarly slashed its S&P 500 EPS forecast in November 2022, noting that since the start of Q3 analysts had already lowered aggregate S&P 500 EPS by about 7%, versus a typical ~3%, and warning of “additional negative EPS revisions” ahead. (investing.com)
• Over the following year, the calendar‑year 2023 EPS estimate fell from roughly $250 in mid‑2022 to about $219 by May 2023 (a ~13% cut), confirming that earnings expectations were indeed revised down materially over the 2–3 quarters after May 2022. (timelytopics.com)
2. Timing of the U.S. equity market low
• The S&P 500’s 2022 bear market trough is widely recorded as October 12, 2022, when it closed around 3,577, about 25% below its January 3, 2022 peak. (marottaonmoney.com)
• Multiple retrospectives identify that October 2022 low as the bottom of that bear market cycle, after which the index entered a new bull market and subsequently advanced more than 20% and later to new all‑time highs (e.g., surpassing 5,000 in February 2024 and 6,000 by November 2024), without revisiting or undercutting the October 12, 2022 level. (campaignforamillion.com)
3. Match to the prediction
• The macro slowdown and associated downward revisions to earnings forecasts clearly materialized over the 2–3 quarters after May 2022 (roughly through late 2022 and into early 2023). (equity-insider.com)
• The S&P 500 made its cycle low on October 12, 2022—about 4½ months after the May 2022 podcast and within the 2–3 quarter window Chamath referenced. That low occurred right as cuts to 2023 EPS estimates were accelerating (notably during Q3/Q4 2022 earnings season). (marottaonmoney.com)
While earnings revisions continued somewhat beyond that exact date, the main elements of Chamath’s call—(1) a macro‑driven earnings downgrade cycle and (2) the equity market’s ultimate low occurring during that downgrade phase and within the next 2–3 quarters—did occur. On that basis, the prediction is best classified as right.