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Technology Stocks : Apple Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Sowbug who wrote (7487)	1/9/1998 6:00:00 AM
From: David C. Parker	Read Replies (1) \| Respond to of 213173

It certainly would be illegal. There would be a number of grounds including insider trading etc. There would also be a problem under that Institutions Proprietary Trading Policy which would require that the Proprietary Trading branch of the institution concerned only get any advice about the upgrade at the time as all other clients. It might also very well restrict the trading in shares on the house account when or if it was known that there was a report in the course of preparation (positive or negative). As far as large institutional clients on whose behalf they trade the same considerations apply, although you could be fairly sure that there are some ongoing discussions between analysts and fund managers at least about trends if not about specific recommendations prior to a release. David

To: Sowbug who wrote (7487)	1/9/1998 9:28:00 AM
From: soup	Read Replies (1) \| Respond to of 213173

>I'm quite sure that that's illegal, assuming that you're talking about a single investment house doing the upgrading and buying.< 1) I know that mutual fund managers have gotten into trouble over buying shares for their personal accounts before purchasing for the funds they manage. It's called "front running". However, for a brokerage house to buy/sell shares for its clients before making a public disclosure of the up/downgrade would seem to be exactly what a investor is (over)paying them for. One of the reasons they even make their recommendations public at all is a marketing imperative. 2) I once had the opportunity to read a Merrill Lynch analysis report of AAPL. Five pages of single spaced numbers quantitatively detailing balance sheet, price to sales, earnings, etc. All backward looking stuff -- the sort of thing an intern would spend two weeks compiling. Zero qualitative analysis about technology, management, brand loyalty, hardware/software product development. 3) The positive quarterly earnings are a trailing indicator of AAPL starting to get things right from a product/expense/marketing side. 4) I know that we're all traders at heart but step back and look at the company vis-a-vis other PC and software vendors. Look at AAPLs diversified products/pipeline and brand loyalty. Look at the significant new product commitments AAPL just got from Oracle, MSFT, etc. Try to come up with reasons wont/can't compete on at least even footing with other vendors. Because if it does, the upside to be gained from comparable price/sales valuations is monster. soup