>> The growth rate is slowing. That bothers the market. Everyone in the industry knows this. Why is it so difficult to grasp?
Hi Carl, That is hard to grasp because it means that growth will continue (to be positive), but people should be disappointed about it.
If my retail store was selling $40k/month in '03. Then $50k/month in '04, then $60k/month in 05, is that a reason to be disappointed ?
For sure the growth rate is slowing. But so what ? Especially if my '05 profit is higher than my '04.
>> If I interpret it correctly he said, "PC shipments will be higher."
How's that for a forecast?
<<
It is far better than the BS of analysts forecasting 60% increase, then downgrading everything because the actual increase was less.
>> PC growth was projected to be higher - 60% higher than the current rate. Yes, the growth rate for the Q1 is positive but it was originally expected to be 17%. In fact, we had this discussion weeks ago.
These kind of forecasts are misleading. i.e if PC sales were 30m units in Q1 '04, and I forecast 30,000,003 units in Q1 of 05, but the actual sales were 30,000,001, then the growth rate "slowdown" is 60%. But how is that meaningful for anyone's profits ?
The further fallacy in these growth rate forecasts is that nothing can grow at the projected rates indefinitely. These rates are set up to bring on disappointment. What we want from analysts is to make a considered forecast of a company's earnings and competitive position. (not just regurgitate the CC "guidance"). If the uncertainties are too much for that, then they should stick to what they are sure about. Such as "PC shipments will be higher in Q2 than Q1".
Sarmad |
