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Technology Stocks : MSFT Internet Explorer vs. NSCP Navigator
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To: Reginald Middleton who wrote (20089)6/17/1998 4:14:00 PM
From: Charles Hughes  Read Replies (1) of 24154
 
>>>The time period was for the 40 quarters ending 6/3/98, or the last ten years (when teh data was available). <<<

Yes, but what was the sample period quanta size? If you didn't in fact compare the results of an unsmoothed quarterly sample size with a long term smoother picture then your guesses based on your presumptions about what would be the result of that hold no weight.

Many significant effects that have little short term correlation show up only with averaging over a greater number of samples. Basic statistics, but it's what makes nuclear explosions go off and clothing fashions succeed or fail.

If this were not true, then you would have to say that it simply doesn't matter for investment purposes whether a company is losing money, which is on its face absurd. I know you don't mean that, and I take your point about shorter term reliance on quarterly figures. 20 years ago, the market was a slave to the quarterly numbers, now investors and accountants and CEOs have moved far beyond that in sophistication, so it doesn't work.

Longer term, you have to make money. I know that you can cook the books, and many or most do to some extent. The question is how do you detect that. When evaluating a company that has prospects but no profits yet, the question is when they will have income. This is for the buy and hold investor who prefers not to use mutual funds or whatever.

Cheers,
Chaz
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