Comment: Signal to Noise Ratio
I dropped into this thread because I perceived the signal to noise ratio to be very high. Allen Benn's posts provide alot of signal, ie good solid analysis. Better than most of the "professional" analysis I've seen on this market segment. Many others also contribute useful information and analysis. I challange you do the same.
When I post to a thread I hopefully attempt to add signal, ie new information, new facts, news stories, or data. Opinion with out facts or some analysis is pure "noise". I ignore noise. If it gets too noisy I vote with my feet (modem) and go elsewhere. Occasionally I like to add some spice to the data to hopefully "stir" up new data.
Looking in the rear view mirror and saying what a stock has done is history. Unless, I guess, if you're a technical analyst. Then I'd like to hear the analysis of trend lines, breakouts, moving averages, volume, etc. The job of investors with a fundamentalist orientation is to look into the future and read the tea leaves to see what might be coming. If you expect a stock to keep going up why don't you share some useful *new* information to reinforce that position. I think we can all read a stock chart.
A stock's price reflects all currently available *public* information. We are all seeking information that the public at large doesn't have yet. Any and all contributions on that front are greatly welcome.
Someone who has visited a company and talked to their engineers might want to share any inside gossip, or new product demo's, product delays etc that might affect future earnings. If you've been to a trade show and have seen the vendors booths and observed the demo's, traffice, etc why not share your observations.
Now for a bit of "signal":
Scanning and tracking the help wanted ad's is a great way to track what's happening in the market place. Another indicator that used to be pretty good was to count the message traffic on the "software forums" on CompuServe (when they were king). Busy forum's with lots of messages indicated a software company or product that is creating some excitment, which might translate into customers. Lot's of "help needed messages" on a the tech-support forum might indicate a buggy product with problems that affect the bottom line. One reason I've never been a big fan of Microware (OS/9) is that their user forum on CompuServe was always dead, ie there wasn't much message traffic. My interpretation was that they did not have many stimulated customers.
For example, it would be interesting to find out which web site Wind River Systems (www.wrs.com) or ISI (www.isi.com) is receiving more hits. How could that information be gleaned? Could one poll these sites and assess by monitoring the access times which one is receiving more traffic?
Peter Lynch always said he liked to walk into a store to assess how a retail operation was doing. How can the on-line investor monitor the on-line activities of software companies?
There are user groups for "realtime" programmers like comp.os.realtime, what does the message traffic reveal?
Cheers,
Dave |
