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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: cfimx who wrote (11531)	12/3/2000 3:22:42 PM
From: Don Earl	Read Replies (1) \| Respond to of 78774

The Bloomberg article doesn't quite cover the facts. The fact is that ANALysts don't have to wait for a company to beat estimates to create a profit taking situation. All they have to do is keep bumping the estimates on a regular basis and sell into the rally. Setting up buying opportunities works the same way. Just wait for the company to fall short of sky high estimates and invent some kind of crisis to explain it away. Also by bumping the estimates, it tends to goad companies into stuffing the channel or to use other accounting tricks that sets them up for a major correction about once every 12-18 months. Gateway is a great example. The EPS estimates were close to 50% higher than the Company's historic best quarter ever. Of course once one company in a given sector "misses" unrealistic numbers, the gloom and doom mongers jump all over it as "proof" that the entire sector is about to go out of business. The most insane part of the article was the hyping of retailers. "If" the economy is slowing, retail would be just about the worst place to invest. People who are out of work, or are paying an extra $100 a month to buy gas for the car, don't go on shopping sprees. Was Gateway really counting on the Thanksgiving weekend to produce profits 50% above their best quarter ever? Give me a break!!! My guess is a fairly healthy chunk of the fund money being held in reserve to target a bottom is flowing back into the market right about now. Freedon of speech is a wonderful concept, but it loses something when financial news services are allowed to yell "fire!" in a crowded theater. Especially after spending months telling everyone what a great movie it is.