Re: An average support call costs a PC maker $25 to $50 to
process, according to some estimates. That explains the
CPQ price drop! Clearly Michael Burke is systematically draining
cash out of the company with his service calls!
But seriously, it is clear that institutions are dumping CPQ. But
CPQ is clearly in better shape than DELL or GTW. So why
are they doing it?
My answer: Cause the institutions have more shares of CPQ
than those other companies.
The other half of the equation is that retail stock buyers are
preventing the market from crashing. That's why retail favorites
like GTW are doing relatively well. If the institutions were neutral,
the Dow would be at 10000 and CPQ would be at 120.
But they're not. The institutions are selling cause of SEA, and
the public just isn't worried.
The news from SEA gets worse and worse each week, with the
vast majority of the effects not to show up until mid next year,
but even now companies are blaming lower earnings on it. Wait
till the cheap imports start flooding the country. The Fed knows
what is going on and there is only one way that interest rates are
going up, and that is if they are forced to defend a crashing
dollar. Maybe that will happen, but not real soon. Until then,
lower interest rates due to fed liquidity are not a good thing for
stocks, instead, they are a sign that the fed is assuming we
are in deep doo doo. It's the fed's job to figure these things
out. The rest of us are just amateurs. And when the fed tells
you that stocks are over-valued, you really need to listen.
steve, with your classes in economics, you ought to be aware of
what is going on. Instead, you are just looking at the immediate
effect on CPQ itself. Step back, and take a look at the forest.
It is on fire. The institutions are running for high ground.
Eventually, the small time investors are going to get tired of
stocks, and then will be the time to short GTW. But as long as
the small time guys are still in dreamland, it is time to short the
institutional favorites. The institutions are rationally reacting to
the news, the public will be dragged along eventually.
-- Carl |
