Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Options Box -- Ignore unavailable to you. Want to Upgrade?

To: jjetstream who wrote (9664)	2/18/2001 12:33:49 PM
From: Poet	Read Replies (2) \| Respond to of 10876

Hey, watch it with that ma'am stuff. <g> FWIW, you and JXM are in good company about your thoughts on Chambers' motives. This from today's Option Investor newsletter: News was out on Saturday that CSCO CEO John Chambers is on the talk circuit again stirring up trouble. In Stockholm Sweden Chambers said "It makes no difference what the Federal Reserve or the latest statistics say. What we see now is absolutely NOT a soft landing. Ask anyone in American manufacturing industry and they will say we are in a recession. If the situation does not change before the half year stage there is a risk of a domino effect whereby the rest of the world will be imminently affected." Add that statement to the NT/DELL/HWP warning from last week and we have some really negative sentiment. According to First Call there have been 294 warnings for the next quarter compared to only 37 for this time last year. The outlook as reported by the financial world is bleak. Now here is where I wonder about reality versus hype. Several economic indicators are already showing a bounce. The Weekly Leading Index (WLI), which was developed by Greenspan's former economics teacher, Geoffrey More, is sending recovery signals. This indicator which dates back to the late 1980s gives a real time snapshot of the economy, not what happened a month ago. It has correctly highlighted the turning points since forecasting the 1990 recession in real time. It is now up four weeks in a row and at 124.0 actually higher than the peak in the economy in June 2000. My point here is companies are making increasingly bearish statements while the actual indicators are already showing new life. Is it possible that we are seeing executives taking the opportunity to talk down future earnings and lowering the bar they have to reach for several future quarters? Am I smoking something funny here or is it really possible that leading indicators and leading companies are moving in different directions? At $28 how much does CSCO and Chambers have to lose? The bad news is priced in and the stock is not likely to drop much more. Does this mean Chambers can take a free shot at trying to get Greenspan to lower rates again and also make earnings targets easier to hit? I would probably do it. He has nothing to lose and everything to gain.