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To: 2MAR$ who wrote (10185)	2/14/2001 9:55:04 PM
From: Walkingshadow	Read Replies (1) \| Respond to of 13572

2MAR$, Okay, here's one for all threadsters to kick around: Just how important are earnings, and earnings growth? Is their significance in determining future stock price movement overstated? RE our recent example, SCMR. askresearch.com Two recent earnings/forward outlook-related analyst downgrades, and today SCMR rallied impressively, up almost 17%---on huge volume. It just kills me that the upgrades/downgrades are completely buried amid the endless, painstaking dissection of the balance sheets and forward projections, especially when earnings come out. Frankly, I'd say that's just part of the tactics. Create a diversion, talk endlessly about it, sound authoritative, let everybody know you have an inside track that the rank and file investor couldn't hope to have, and people will be more likely to follow the recommendation---and completely forget that, had they followed the analyst's prior recommendations, that would have been good (in the case of SCMR) for a 90% loss---booked, not paper. And, that's not counting the losses which might have accrued from those shorting the downgrade. And you can be sure, that if SCMR rallies and one day takes out its former high, nobody will bring up the fact that the analysts got you in at the worst possible time, and then got you out again at----what a coincidence!--- the worst possible time. I'm becoming more skeptical all the time that earnings growth is really as important as they would have you believe. For one thing, there's plenty of companies around with either no earnings or rather mediocre earnings growth that the market has nevertheless decided it wants to own. And besides, if everybody had exactly the same insight into earnings guidance that analysts have, would anybody ever feel obliged to listen to them at all? Isn't their privileged position close to management---essentially insider information---that gives them much of the credibility and significance that people attribute to them? And if this is the case, of course you would expect endless discussion of earnings minutia and proclamations about same issued from on high; it may be the one major thing that allows the game to continue to be played so successfully. As for the analysts: A masterful job, once again. They'll likely all get raises. No joke. JMVHO, Walkingshadow