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Technology Stocks : DIGL... Digital Lightwave.... Making Waves.... -- Ignore unavailable to you. Want to Upgrade?

To: squirrel who wrote (268)	1/22/1998 9:16:00 PM
From: ahhaha	Respond to of 934

Mass is proportional to the number of analysts that follow the company and goes critical when that gets to 20. Then the mass is unstable and could explode. Another way of saying it is "reliabilty of meeting projected earnings". As a company gets larger it becomes more predictable because significant change won't occur in its extablished markets and the company won't do anything to upset the stability of ROE. This can happen with small companies in niche markets or proprietary products with little competition. If a small company operates in a market with little growth, competition stays away so expectations for future return are predictable. One reason that ORCL got clobbered was that they have established high visibilty of return; they had reached critical mass two years ago. When large scale companies have a small deviation from the mean expectation, bam, they get whacked because confidence is high that the deviation is profoundly structural, and difficult to overcome in terms of the inertia of strategic redeployment of resources. When small companies have even a fairly large deviation from expectations, they get whacked, but it is easier to bounce back since the company doesn't have the inertia of size to overcome. Guess we'll see if the news on DIGL will put them through this test.