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Non-Tech : wendy's
WEN 7.960-0.4%Jan 28 3:59 PM EST

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To: Lynda Culberson who wrote (32)7/31/1997 2:15:00 PM
From: Walter High   of 91
 
Lynda:

Seems these days that stock prices respond more to the forward-looking comments associated with earnings announcements than with the earnings themselves. That is why you see some great earnings reports followed by a drop in a stock's price. The forward-looking comments usually mention having a tougher time in the future.

Analysts ask these kinds of questions of company officers without fail, and do so rightly because when you buy stock, you are buying the future earnings, not the past earnings. Ratings and stock prices are based on future prospects. Also, company officers try to avoid potential lawsuits by warning in advance that times might be tougher in the future. Seems like half the tech companies these days have shareholder lawsuits due to huge, unexpected stock price drops.

Hope these comments address you question somewhat.

Walter High
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