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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: darryl25 who wrote (48640)	11/7/2001 11:06:02 AM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

Darryl, Good questions. The most important issue for me is that management is supposed to be not only truthful with investors, but also open. That means that any time there is a noteworthy change in the expectations of a company, especially if the expectations have been fostered by management, management should share that information as soon as they become aware of it. It seems to me that regardless of when management tells us that earnings will fall short, the result is still the same: earnings will fall short. You're right, but the importance of the issue has to do with a lot more than just the earnings. In a big-picture view, the timeliness of distributing important information speaks to the credibility of management. As an example, there are details of contractual agreements that management understandably can't disclose to investors. If management has earned our trust with issues that they can disclose, it makes it easier to entrust management with the issues they can't disclose. But on the other hand, there are never warnings to the upside. Because of the declining economic environment, that hasn't happened in quite awhile but it does occasionally happen. You're right that it should happen in a more balanced way with the same attention paid to upside changes in expectation that is paid to downside changes. --Mike Buckley