Michael:
1. Does Greenspan have the power to raise margin requirements?
He's Fed chairman, but SEC has authority over margin. Margin
requirements should definitely be raised to remove speculation,
but I'd hope for a gradual increase, say from the current 50% to
45%, then 40%, in two slow steps. Anyway, we'll see.
2. Depends on which estimates, but I can't quite agree. Analysts
pretend to look at lots of factors, but in the end they just
multiply last year's figures by their projected growth rate and
then claim the resulting numbers as the "estimates" for next year.
I follow this company closely, and last year Q1 was 12 cents
(before the acquisition charge) and Q2 was 20 cents. Conservative
estimators such as myself are expecting only 35% growth, the
herd is looking for 40%+. Using 40%, 12 cents becomes 17
(exactly what Oracle hit last quarter) and 20 cents becomes 28.
This sort-of justifies your statement that they missed by a bit
for Q2, though (just to be completely accurate) analysts had
already lowered the "consensus" to 26 (very convenient, eh?).
Same game played with MSFT estimates, and (watch and see) INTC
estimates next year.
3. Since my last post to you I've come to the conclusion that
this is a liquidity-driven market, and virtually nothing short
of World War III is going to bring the party to an end. For
stocks to trade down, the money has to flow somewhere (cash
or bonds). Only higher interest rates will make such investments
look attractive, and there are only two ways this is going to
happen: foreign money stops flowing in to finance the trade
imbalance, or inflation picks up (due to energy prices --
everything else is either irrelevant or subject to Greenspan's
keen eye and steady hand).
Cheers! |
