"I can see the potential for troubles this Q, but Q4 looks like a total slam dunk."
Everyone has to remember that we're not the only ones who think this way. Analyst estimates are not always a good relative indicator for how the stock will react post-earnings. Q2 was a good example. Blowing away the estimate was met with a short stock price bubble that was almost immediately burst. Problem was, EVERYONE knew AAPL would blow those estimates away. No surprise, no reward.
Q3, on the other hand, was met was a good deal of skepticism. Will the coming iMac hurt current sales? What about the Powerbook supply problems? Even the bulls on this board would post messages about hand-wringing on the quarterly number. Surprise surprise, then, that when the number killed estimates the stock blew skyward.
Therefore, I'm gleeful when I read more hand-wringing about the upcoming quarter. This is not because I know something no one else does. It means that a favorable earnings surprise may not have been priced in to the stock already like it was for Q2. Q4, on the other hand, with terms like "slam dunk" leaves less room for error and more for downside surprise relative not to "analyst projections" but to real-world investor expectations.
Andrew |
