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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Lazlo Pierce who wrote (5531)	3/25/1998 5:21:00 PM
From: Pancho Villa	Respond to of 18691

To all: one thought on MSFT's beating the quarter. I have not read the financial statements of this amazing company lately [I last sold my long position at 114 before the split, to great regret] Does any one remember the emergency asset/liability combo account combination they can use to dampen quarterly fluctuations? [Gates knows how much importance the street gives to quarterly numbers so he reduced it down to a science: He uses a filter to smooth out the bumps!] Here goes my idea of how the beating of estimates came/comes about: It all starts by forcing down analyst estimates as hard as they can early in the quarter (this is OK as there are a million companies with worse financials/fundamentals selling at higher multiples - pick any of Roger's favorites). Then, in this outrageously overpriced market in which despite the rise stocks like AOL are beating MSFT, Gates, a highly competitive guy, gets a little bit worked up, feels like boosting share price a bit in order to beat AOL, by dumping some of the "reserve revenue" funds into the quarter! Would not be surprised the actual earnings number is actually higher that the new estimate! Pancho PS: will insiders take the opportunity to sell a bit?