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Strategies & Market Trends : Bill Wexler's Profits of DOOM -- Ignore unavailable to you. Want to Upgrade?

To: Lachesis Atropos who wrote (2989)	9/24/1998 4:58:00 AM
From: hasbeen101	Read Replies (1) \| Respond to of 4634

The math is generally just a simple discounted cashflow (NPV) of future estimates. Good analysts are the guys who can guess what's going to happen in the future. For exmple, IBM was a fantastic growth stock for decades. About 7 years ago it fell in a hole. The smart analysts were the ones who could see that, with IBM's monopoly over mainframe computing, and PCs growing like topsy, there was huge risk that the earnings growth would fall in a hole. The fact that it had grown strongly was irrelevant. Or what about DEC? They peaked around $173 a share when minis were dominant. The smart analysts was that minis were going to be squeezed from both sides, and that proprietary operating systems for minicomputers was a phenomenally dumb strategy. They worked this out before the earnings tanked and the stock price dropped to 20. Technical analysts try using the past to predict the future. Fundamental analysts really don;t care about the past, and they only use it as a "base case" for predicting the future.