Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Micron Only Forum -- Ignore unavailable to you. Want to Upgrade?

To: Carl Held who wrote (41057)	11/25/1998 11:47:00 AM
From: Carl Held	Read Replies (1) \| Respond to of 53903

More examples of how this game is played.... U.S. stock technical indicators. **CUMULATIVE 3RD QTR U.S. EARNINGS SURPRISES AS OF NOV 23 POS/% NEG/% ON TGT/% S&P 500 484 238/49% 122/25% 124/26% I/B/E/S Universe 4223 1992/47% 1404/33% 827/20% $500 mln or less 2695 1182/44% 1025/38% 488/18% $500 mln - $1 bln 519 277/53% 143/28% 99/19% $1 bln or more 1009 533/53% 236/23% 240/24% ----------------------------------------------------------- Data on earnings reports exceeding (positive) or falling below (negative) analysts' expectations provided by I/B/E/S. If you look at the negative % column, it ranges from 23% - 38%, now look at the positive & on target. The point: As you can see, analyst will show that companies earnings meet or beat estimates. Take the average and it is 70%. The result: Prices will go up whether the companies makes money or not. This is dangerous and not fundamentally sound. Brokerages just want to sell stocks. Just remember one thing, the big boys don't care about the small investors, they will burn them. The clueless investors should take note.....

To: Carl Held who wrote (41057)	11/25/1998 11:13:00 PM
From: Carl R.	Read Replies (1) \| Respond to of 53903

Carl, if I were an analyst, I too would try to set achievable targets, and not because it is a game. First of all, you want to be accurate. But when you publish your estimate your reputation is on the line, as well as the reputation of the company. The penalty for a company failing to meet an estimate is much higher than the penalty for the estimate being low, so long as it is not way low. Thus companies guide the analysts to a number that they think they can make, and the analysts publish a number that they are pretty sure is achievable. I see nothing sinister here, just an eminently reasonable way of doing business. When I estimate how a company will do, I try to guess low as well - better to be conservative. Note that a logical extension of this is that when the analysts say that the semiconductor industry will be slow for 1 1/2 years, that estimate is probably also conservative. They probably believe that there will be clear signs of recovery well before that, as early as the 2d half of 1999. There are two very strange things about your post where I am not clear what exactly you are trying to say, and I would appreciate a clarification. The first of these is that you appear to be saying that the analysts are hyping the semiconductor stocks and encouraging buyers to buy stocks by issuing overly conservative estimates. Now if the estimates were overly optimistic, I could understand allegations of hyping, but your own evidence shows that most analysts are conservative. The second odd thing in your posts is the allegation that the movement of large blocks implies that the big guys are bailing out. Who exactly do you think are buying the large blocks? It isn't me, I can assure you. <VBG> Seriously, in order to move a large block, you need both a buyer and a seller, and both must be large. Thus it would be just as logical (and just as wrong) to say that the large buyers are jumping in as to say that they are bailing out. Some are bailing out, others are jumping in. Carl