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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: pater tenebrarum who wrote (1053)	10/23/1999 2:50:00 AM
From: Dwight E. Karlsen	Read Replies (1) \| Respond to of 19219

HB, re >that is possibly in the works here...note that the bullish sounding conference call by MSFT can be interpreted as a warning sign...why would the firm that habitually gives cautious guidance all of a sudden go overboard with hyperbole?< I also feel the MSFT cc is suspect. In last qtr's "analyst day" a day or two after earnings, you probably remember that Bill G was heard to have joked, after Maffei made some positive comments on future growth, "somebody pull his mic". Of course, positive comments are fine if that's what the expectation is, but for the tone of the last cc to be almost euphorically positive, makes me wonder what the insiders are planning on doing in the weeks and months ahead. Probably dumping larger than normal loads of stock, into buying strength. What do they see that they aren't tell us now? Of course, if revenues level off, they can point to the July '99 analyst conference and say that investors were fairly warned. As for >some of the sequential revenue and deferred earnings data in the quarterly report showed the first decrease in a long time...funny enough, not one WS analyst took the time to point this out or ask the company questions about it. the red flags are everywhere for those who care to look...< That one is easily explained. A few weeks prior to the June Qtr earnings announcement, MSFT announced that the SEC was conducting an "investigation" into MSFT's practice of deferring some software revenue, then reporting it in future quarters. The practice was actually conservative, and did have a GAAP reason for it: Since MSFT provides free updates, driver patches, etc, plus provides 30 days (60?) of free tech phone support, they are always incurring expense for revenue booked in a prior quarter. I myself never immediately register a newly purchased product with MSFT right away, because your 30 days starts from the date you register it. "Purchased product" means either off the shelf or bundled with a new computer. Therefore, sometimes MSFT is providing free tech phone support for a piece of software for which they received revenue more than a calendar qtr ago. So on that last case, the deferred revenue item is down, because MSFT is now recognising more in the qtr they sell it, in response to accusations they use "cookie jar" accounting. At least they have cookies to put in a jar for another day. Overall, MSFT deserves a high multiple, at least from what I can see. Regards, sign me, "A long from last Monday who got shook out by Big Blue on Thursday morning". At least the trade was profitable, even if I succombed to FUD.