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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: Mo Chips who wrote (14966)	7/9/1998 4:05:00 AM
From: The ChrisMeister	Read Replies (2) \| Respond to of 77400

"Are there any old timers out there that can comment on if the whisper number is a new phenomenon?" Not that I'm all that old, but the answer is a definite yes. You're right, the idea behind these rumored numbers is very new, an invention of the last approximately two years, I'd say. It's unfortunate that it's caught on the way it has. But the notion that someone has the very latest inside poop just before the public gets it officially is an old one. Otherwise you take all the analyst's estimates, average them, and come up with a "consensus" number. I guess that's too boring for the CNBC age, and so they have to manufacture another number to satisfy the growing anxiety as the market goes ever higher. Just goes to show that Wall St runs on information (and its perception) rather than $$'s. Never enough numbers... The thing I've noticed over the years is that stocks tend to run up in advance of the earnings announcement and then sell down afterwards, regardless of what the facts are (unless they're a real surprise). This is because the certainty of the number itself has value and gets built into the stock price. As soon as the number is out, it's some 13 weeks of relative uncertainty until the next number comes out. This is why there's frequently a sell-off even after decent news, puzzling a lot of people who think the market should rightly reward a good earnings report with a (further) move up. Sometimes that does happen, though it tends to be short-lived, to the day or two after the number. Then the market moves on to focus on some other stock. Market lows often come in that middle period halfway between reports. This all amounts to the old "sell the news" adage. It's no coincidence that the NASDAQ and S&P 500 averages are at record highs right here in earnings season, taking out the highs set at the end of the last season. Since the bizness media always has to sound like they have a rational explanation for whatever happens in the market, the whisper number gives them that leeway they need so they never sound like they're wrong: XYZ Corp reports good earnings, but the stock's off 1 3/4 -- must have missed the whisper number. Pure unadulterated BS, made in the USA, IMO. I feel better now... ChrisMeister

To: Mo Chips who wrote (14966)	7/9/1998 2:50:00 PM
From: billwot	Respond to of 77400

Mo-Re:"the whisper number" The whisper number is simply the concensus of rumors and expectations in the investor community, and thus has existed as long as people have traded stocks. What is new is the consolidation of the rumors and wide dissemination, almost entirely as a result of the growth of the 'net. I see complaints on many threads about the "new" whisper numbers because a stock tanks when it misses the whisper number. They overlook the fact that is was the whisper number that had pushed that stock up to begin with. Stocks will always be valued based on what the investment community at large believes about a company's prospects. When reality (in the form of earnings announcements) alters that perception, the price will change. JMHO billwot (long on CSCO)

To: Mo Chips who wrote (14966)	7/9/1998 9:37:00 PM
From: t36	Respond to of 77400

i think at the earnings announcement they will also talk about the stock splitting..they usually do it at that time..sue

To: Mo Chips who wrote (14966)	7/11/1998 8:04:00 AM
From: Kent Rattey	Respond to of 77400

Pssst! The scoop on whisper numbers Web whispers can be more accurate that official forecasts. But they can be way off target, too. moneydaily.com The prevalence of whisper forecasts -- the earnings estimates exchanged on investor message boards - has grown significantly in recent years. And a recent study indicated that in many instances, these unofficial whispers are more accurate than the official analyst estimates coming out of Wall Street. In a recent MoneyLive Yahoo! chat, two of the professors who conducted the study, Susan Watts from Purdue University and Mark Bagnoli from the University of Michigan, discussed their findings. Here's what was said at the chat, moderated by Ed McCarthy. Question: The whole idea of whisper numbers seem foreign -- where do these numbers originate? Susan Watts: No one knows for sure. Some appear to come from brokers or analysts. Some appear to come from investor relations departments of firms themselves. Some appear to come from individuals who feel that they can forecast earnings. Many are simply not attributed. Audience: What effect can whispers have on the market? Susan Watts: Whispers have been known to have significant effects on market prices. A recent example is Dell. Analyst forecasts were $.42; the whisper was $.45. The stock price went up on the whisper. Actual earnings came in at $.44, and the stock price fell. Trading on whispers was blamed. Question: You've done extensive research into whisper numbers versus Street analysts' numbers. Could you tell us a bit about that research? Susan Watts and Mark Bagnoli: We found that First Call analysts' forecasts tended to underestimate earnings by approximately 6.1 cents per dollar of earnings reported. Whispers tended to overestimate earnings by approximately 4.9 cents per dollar of earnings. This suggests that whispers "undo" the underestimation in analysts' forecasts but may be too enthusiastic at times. We also found that stock prices incorporate the information in whispers. For our sample, if you knew the whisper and the First Call forecast five days before the actual earnings release, you could have made about 1.5% more than if you had invested in an S&P index fund. Of course, these results are for our sample, and we cannot guarantee that they will replicate on any group of firms. Audience: If the whispers are overestimated by about 5% then it seems that they are orchestrated by investors so as to raise the price in their favor. Is this an accurate assessment or are they actually based on fact? Susan Watts: This is a tricky question because no one puts their name behind a whisper. The SEC has investigated some suggestions that whisperers may have been touting stocks, so your assessment may be accurate-but we can't say that for sure. Audience: Where can a person find these whispers? Susan Watts: We found most of our whisper on investor Websites such as Motley Fool and Silicon Investor. Mark Bagnoli: In a recent magazine, Online Investor -- the premier issue -- I saw a number of other Websites. They suggest that there are good chats at stockclub.com and stock-talk.com. Please understand that we are not advocating the use of any particular Website nor trading on any information found in a Website. Question: Based on what you've found, should long-term investors pay attention to whispers or is it a topic that would concern only traders? Mark Bagnoli: No long-term investor should be trading on the basis of short-term stock price movements generated by information surrounding an earnings release. Audience: Are the whispers providing more reaction than say four years ago? Susan Watts and Mark Bagnoli: The advent of the Internet and investor Websites has definitely provided wider dissemination of whispers. When the investor Websites began to proliferate, we began to find more whispers. In terms of the future, there are some indications that firms are beginning to try to "manage" whispers and if they succeed, the natural expansion of whispers could be inhibited