To: Clarksterh who wrote (8090 ) 2/6/1998 6:29:00 PM From: Caxton Rhodes Read Replies (2) | Respond to
FOOL PLATE SPECIAL-Qualcomm Falls Flat An analyst at BT Alex. Brown summed up the majority opinion in the analyst community on the matter this morning, "Last month, they said Korea's manageable and now they say they have a problem. They've ruined their credibility." This response seems a natural one, but begs the question, whose credibility has been ruined? The company that makes a forecast, or the investment community that embraces the optimistic assessments without scrutiny. Fool me once, shame on you, fool me twice, shame on me. The fundamental issue that this raises is the time and resource constraints (as well as institutionalized perceptions) that prevent independent verification of information. The simple fact is that investors (analysts included) are inundated with information and the urge to quickly classify data is intense. The dissonance in our brains is ameliorated when we, ahhhhh, file those "conclusions" away, because lingering uncertainty hurts. As more people pile on and agree with these conclusions (the accepted view), it becomes harder and harder for individuals to go against the grain. And in the case of Qualcomm, phone calls to South Korea are expensive.
