Carl, if I were an analyst, I too would try to set achievable targets, and not because it is a game. First of all, you want to be accurate. But when you publish your estimate your reputation is on the line, as well as the reputation of the company. The penalty for a company failing to meet an estimate is much higher than the penalty for the estimate being low, so long as it is not way low. Thus companies guide the analysts to a number that they think they can make, and the analysts publish a number that they are pretty sure is achievable. I see nothing sinister here, just an eminently reasonable way of doing business. When I estimate how a company will do, I try to guess low as well - better to be conservative.
Note that a logical extension of this is that when the analysts say that the semiconductor industry will be slow for 1 1/2 years, that estimate is probably also conservative. They probably believe that there will be clear signs of recovery well before that, as early as the 2d half of 1999.
There are two very strange things about your post where I am not clear what exactly you are trying to say, and I would appreciate a clarification. The first of these is that you appear to be saying that the analysts are hyping the semiconductor stocks and encouraging buyers to buy stocks by issuing overly conservative estimates. Now if the estimates were overly optimistic, I could understand allegations of hyping, but your own evidence shows that most analysts are conservative.
The second odd thing in your posts is the allegation that the movement of large blocks implies that the big guys are bailing out. Who exactly do you think are buying the large blocks? It isn't me, I can assure you. <VBG> Seriously, in order to move a large block, you need both a buyer and a seller, and both must be large. Thus it would be just as logical (and just as wrong) to say that the large buyers are jumping in as to say that they are bailing out. Some are bailing out, others are jumping in.
Carl |
