Jules. Re: "Vindication is indeed sweet." Yes indeed! You were the first to see the shell game going on.
Saw this article about the analyst who called it in today's WSJ. Thought of you.
Legwork Provided One Analyst
With a Leg Up on IBM Quarter
By ROBERT MCGOUGH
Staff Reporter of THE WALL STREET JOURNAL
"All right, we know this isn't rocket science. But it underscores the importance for analysts to kick the tires now and again, and not simply rely on the companies they cover for information. And the call took guts: The consensus of 22 analysts measured by First Call/Thomson Financial was for IBM to earn $1.33 in the fourth quarter. The next lowest estimate to Mr. McCarthy's $1.10 was $1.23, according to First Call.
Mr. McCarthy "had his neck out early on, and nobody paid much attention, including his fellow analysts," says Chuck Hill, First Call's research chief. "He stuck with it and turned out to be right."
On Wall Street, it's daring to say anything negative about companies -- especially such widely owned stocks as technology. "It's been a rough ride, because it had not been a pretty popular call," Mr. McCarthy says.
IBM and other technology stocks kept rising in price, and "people were saying, 'Hey genius, you're running out of rope here.' "
Why did Mr. McCarthy unearth IBM's Y2K issues months ago, and why didn't other analysts find out, too? The answer says a lot about what's lacking in Wall Street research today. Too often, analysts rely on executives at the companies they cover to let them know what's going on in the business. Mr. McCarthy went beyond the corporate spokesmen, and talked to the clients of IBM and other tech firms -- and found out things that IBM itself didn't know. (Or pretended not to know.)
In another article it noted that Gerstner sold some 770,000 shares in May and August after hyping the price. Ethical guy.
HL |
