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Technology Stocks : HWP -- Hewlett Packard -- Ignore unavailable to you. Want to Upgrade?

To: Lazlo Pierce who wrote (2173)	5/14/1998 9:08:00 AM
From: Dwight E. Karlsen	Respond to of 4722

David - I've been down this road before. Look: The company is making 65 &cent per share this quarter. It's not their fault if that doesn't measure up to analyst's guesstimates. It's not like they are losing money! Come on man.

To: Lazlo Pierce who wrote (2173)	5/14/1998 11:00:00 AM
From: Oeconomicus	Respond to of 4722

That is why companies warn early. To head off possible lawsuits. David, I think that has little to do with it in most cases. The more likely reason for "warnings" is expectations management. Companies have learned from MSFT in particular that if you "warn", you might take a short-term hit, but analysts will cut estimates based on your warning and, when you then beat the new estimates (but not the old ones), your stock will more than recover the hit it took from the warning. HWP has a reputation for "telling it like it is" and they have been saying for months that Asia was a problem. Perhaps even conservative HWP underestimated the problem. The PC sector's problems are also well known. The market chose to ignore all these problems and analysts recently decided that HWP's PE should expand. Why? Growth isn't accelerating. Interest rates aren't falling. These "analysts" had nothing but momentum as a reason for upgrading. Those who listened to them and bought at $82 should be mad at the analysts, not HWP management... On second thought, they only have themselves to blame for listening to the analysts to begin with. Sorry if you lost money, but I never expected HWP to trade into the $80s now, so low $70s is OK with me. Actually, since I had written some calls against it, the correction has some benefit for me. And, as Warren Buffett said in his shareholder letter, long-term investors expecting to buy more shares over time should be happy about lower stock prices in the near term. Regards, Bob