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You have to think that after 14 consecutive quarters of beating consensus
Cisco would have pulled out all the accounting stops to repeat the pattern
this quarter. If they did, they still missed by a penny. What does that
say? Bigcharts.com has their P/E at 83. Man that's high. But 18 cents was
50% growth over last year's 12 cents. Not bad. Just depends on how much
fluff is in the stuff.
Re: Inflation. Someone recently pointed out that energy prices (petro and
electrical) have been exceedingly high for quite some time now and they
haven't filtered into some of the more mundane items of the economy outside
of the companies that are directly affected (transport, etc.). This would
tend to indicate that there is still a good bit of deflation in the economy.
I don't deny that real estate has been sky high, but that could be explained
by the fact that so many people had more and they felt good so they were
willing to pay more. Sure, the 8000 Boeing programmers whose average salary
was $50,000 went on strike for higher wages last year and by all accounts
got it, but a little fear in the economy and the recent layoff announcements
will put a stop to that. Seems like inflation/deflation are fairly well
balanced right now.
The only thing that really, really concerns me is the massive amounts of
corporate and personal debt washing around. If people started worrying
about that and quit spending, then we're screwed for a good while.
Greenspan and W had better keep cutting fast and hard a make sure this
economy sees a short V bottom or we could be looking at a long, long
recession.
Kent
-----Original Message-----
From: Don Thompson <detomps@xxxxxxxxxxx>
To: realtraders@xxxxxxxxxxxxxxx <realtraders@xxxxxxxxxxxxxxx>
Date: Wednesday, February 07, 2001 12:33 AM
Subject: Re: [RT] the new Economy
Ira and all.
Tidbits from the valley.
I hear that the networking/teleco/routing hardware manufactors are seeing
the next two quarters as very difficult. They don't see it getting better
for two quarters.... So your hunch is near to correct. at least in the above
context. But if they were thinking that they would be outa the woods by now
then maybe a couple of more months to go.
Back almost a 5 months ago, one of my friends just could'nt understand why
the hell Wall Street was bashing the tech stocks, because, all the people he
talkes to, and they aren't production or middle management was seeing good
demand. The same tech hiatus happened last year, he said, and due to
psychology of managing inventory, there will be a shortage of equipment in
March, 2001.
What is interesting about Cisco, is that they carry most of thier inventory
at Solectron, the boxes are completed up to 80 percient and put on a shelf!
I guess this year Solectron didn't want to do this since last year they got
beat up badly. This might explain the build up of inventory.. interesting
accounting practices.
Don
----- Original Message -----
From: "Ira Tunik" <irat@xxxxxxxxx>
To: "realtraders" <realtraders@xxxxxxxxxxxxxxx>
Sent: Tuesday, February 06, 2001 8:25 PM
Subject: [RT] the new Economy
> The money supply is accelerating at a rapid pace. Interest rates are
> falling at a record pace. they say that inflation is stagnant, yet the
> cost of living is accelerating at a rapid pace. There is an increase in
> job lay offs and yet there is pricing pressure on wages. I think the
> Fed will soon be caught between a rock and a hard place.
>
> many months ago I gave the bracket for the dow at 10,000 to 11,000.
> those parameters seem to be holding. What can we expect next? Market
> psychology says that the market looks ahead 2 quarters. the fall in
> stock prices that started last March foretold what happened at the end
> of the year. If there is to be a recovery at the end of 2001, then now
> is the time for the markets to start to rally. If this bear is to be
> protracted, then look for a fierce short covering rally and then a
> blowout to the downside that will cause the die hard, buy the dips,
> mentality to give up the ship.
>
> I am not a fundamentalist, but even a technical person has to look at
> the underbelly once in a while. have a good week. Ira.
>
>
>
> To unsubscribe from this group, send an email to:
> realtraders-unsubscribe@xxxxxxxxxxx
>
>
>
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