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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Softechie who wrote (88498)	6/29/2002 3:40:09 PM
From: LTK007	Read Replies (1) \| Respond to of 99280

Good News for Bears Sometimes answers to questions can be simplicity itself. Fortune Magazine in addressing the question, why with good economic news the market keeps going down? We have been given data that says corporate profits have increased 15% since 1996 BUT what if investors now believe those figures are bogus by 15%(and they say that the 15% is being very generous, investor are likely thinking worse than that) then the market should accordingly price down to 1996 evaluations which be DOW 5697/SPX 673 and Nasdaq 1230. Buffet is winning, he is back, after all the bull boneheads mocked him,derided him as that "behind the times old fogey"(and i would at times be set into a rant at the just plain rock-headed that had taken control). Buffet is simplicity itself, it is about present profits and future profits, it not about P/S , revenue growth, and with Buffet he does not even go by CashFlow(can be deceiving). For instance EBAY is still a bubble stock, one of the last bastions of the WS internet hype. EBAY Forward P/E based for the EOD Fiscal year 2003 is about 50-1. Any price for EBAY over 30dollars is ludicrous. All this is going to sink in, slowly but surely. Why? I would wager a major sum of money that at least 90% of all investors didn't have a clue as to what Pro Forma meant-- not an inkling. I would say maybe as many as 50% are getting a handle on this phrase "Pro Forma". And the word "profits" is beginning to ring a bell in the average investor(who as i have noted can either be a neurosurgeon or a janitor,as average investors are nearly everybody, at least 90% of the population)), "o yes, profits, that is important, i remember a fellow called Warren Buffet used to say that; hmm i guess i really need to learn what that word means and how do i know when am being lied too" or simply "This Pro Forma means LIE, therefore all they tell me be lies and therefore i believe nothing, they are all crooks out to steal my money". The psycho-dynamic of the "the herd"(used affectionately, but essential to understanding market behavior) It is my belief that by the time this pendulum completes it's slow swing the market will reach as far back as 1995. <<The Good News Bears All the economic news is bullish. So why does this feel like a bear market? FORTUNE Monday, June 24, 2002 By Justin Fox>> fortune.com p.s. i will never forget, just maybe 6 months ago on CNBC the MSFT number came out and they all looked suddenly pale and speechless(it was much worst than estimates). And then someone said "It"s GAAP" And then all then smiled and were happy again. "O that is JUST the GAAP, ha ha!' "o here is the Pro Forma number, and look at that they beat the estimates!!" O how "the herd" thinks, mind boggling. I re-iterate the fact that First Call in future will no longer base estimates on Pro Forma measure. And by the time the real P/E's finally get out there, the market has ONLY one destination, down. A newsweek reporter said, the market will start rising and running again and everybody will forget about reform--one problem; i suspect this is not reality based cynicism but the latest line that people buried in the market are selling themselves. max

To: Softechie who wrote (88498)	6/29/2002 11:38:20 PM
From: puborectalis	Respond to of 99280

SONS....What’s to like about Sonus? ... it’s the market leader in voice softswitches, one of the more viable niche telecom markets. ... most telecom equipment markets are the equivalent of the college kegger, packed with young and enthusiastic ravers. The only problem is, you have to survive an intolerably long line to the keg, and there are an awful lot of competitors – many of them sick. The voice switch market is a more sedate affair – the cocktails are generous, and there’s more elbow room. In fact, Sonus is the lone, public company of any import in this market.