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Technology Stocks : Oracle Corporation (ORCL)
ORCL 217.60+1.5%Dec 5 9:30 AM EST
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To: Hardly B. Solipsist who wrote (9354)1/17/1999 12:09:00 AM
From: MeDroogies  Read Replies (1) of 19080
 
Yes, but unfortunately I don't think many companies take this seriously.
For example, many companies, when they see demand pressure, assume they can raise prices precipitously. This pretty much assures they will make some great short term profits, but it softens their market 6-12 months out. Too many companies focus on expanding their margins as opposed to increasing their profits.
I don't see that changing anytime soon. Why? Because in order to do so, there has to be an inherent understanding of the relationship between price and value.
Based on what I've seen in the stock market and in most pricing behaviors is a desire to squeeze as much as possible out of the current consumers/users. Obviously, the high-end consumer/user won't immediately flee. Margins rise (as do profits in the short run), and the company looks hot. Sometime down the road, margins fall (as do profits). This is unhealthy.

AAPL is actually a company I admire right now. They haven't really shaken down their consumers despite high demand. In fact, they are now cutting their margins to keep interest in their product high. My initial reaction is positive. It will work for them.
I like companies whose margins are stable and show increasing profits. Typically, they have loyal consumer/user bases and can offer the opportunity to grow that.
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