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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: IQBAL LATIF who wrote (29629)	11/8/1999 2:33:00 PM
From: IQBAL LATIF	Read Replies (1) \| Respond to of 50167

Another side of the story............RHAT Contributed by: David Wilson WilsonReport.com Third quarter earnings look good, but what about the fourth quarter? With almost 90% of the companies in the S&P500 completed reporting their third quarter earnings, it looks like the final results will show a 22% year-over-year gain for third quarter earnings. As the calendar rolls into November, it is time to turn our attention away from the third quarter and instead focus on fourth quarter earnings. We have already had a rash of negative pre-announcements for the fourth quarter and analysts have been busy slashing earnings projections from 20.5% on October 1st to 18.4% at the end of October. It is too early to tell if all these negative pre-announcements is an anomaly or the start of something, but it is certainly worth paying close attention too. Even with slightly disappointing fourth quarter results, 1999 has been a very good year for the S&P 500 companies. Yearly earnings growth should come in around 17%, which is still a huge improvement over last year?s 3.7% gain. Bulls coming out of the woodwork The stock markets rebound over the last three weeks has turned some prominent Wall Street analysts into bulls. Ralph Acampora of Prudential Securities, thinks that the mid-October lows were the final lows for the year and he sees smooth sailing for the Dow until 11,300, while market strategist Elaine Garzarelli thinks that the economy is starting to slow-down and that means interest rates will be falling. At the popular "Money Show" convention last week in San Francisco, Louis Rukeyser moderated a panel discussion that included Wall Street veterans Joe Battipaglia, Gail Seneca, Frank Cappiello, and John Dessauer. Rukeyser asked each panelist where the Dow would be in ten months. Cappiello said 13,200; Dessauer said 13,437 on high with a low of 10,153; Seneca said to expect 12,000 to 12,500; and Battipaglia called for a Dow in the area of 13,000. This sudden bullish exuberance worries me. I prefer it when Wall Street is very pessimistic because stocks usually rally in that environment. When everyone expects the market to rise, it usually doesn?t and causes me to think that we will be re-testing those October before year-end. Is it worth $6 billion? Red Hat (RHAT) a developer and provider of open source software and services, including the Red Hat Linux operating system, has been on fire since its IPO earlier this year. But is the stock all hype? I think so. While Linux is a nice alternative operating system to Windows NT, Red Hat has become the holy grail for the anti-Microsoft crowd. That is fine but with a $6 billion market cap, Red Hay needs to be more than a freeware with technical support. Just as Wall Street has figured out that Amazon.com?s story isn?t working, they will figure out that Red Hat is not worth $6 billion. When that happens, look out below!