It would be interesting to make a systematic study of all the negative guidances given by companies, classified by the extent of the move. The moves in individual stocks related to these guidances have to be as ephemeral as those in relation to the random monthly announcements that make the public contribute so much more than they have to. The problem is that studies of 10 years ago, show that these guidances and reductions in earnings estimates were negative. And the funds don't wish to be caught holding such a reduced estimate company as it makes them look bad.

Ultimately the value of companies is determined by… wishes he knew, but it has to be the time and p/e that will attach to it when it shows normal future growth relative to the economy. At that time it will have a market p/e. As to the impact of a lowered guidance, of what consequence does that have, unless you believe that in this day and age, the guidance signals something, as if they can't keep the analysts happy from taking things out of the silo, or selling a little something a bit earlier, perhaps they have a deep seated problem. But as to whether you make it this quarter of next quarter as Hewlett and other unmentionable companies have said they are going to do, what could be the total absurd ridiculous non-recurring significance of this.

Along those lines, one notes that the earnings estimates of the S&P for the next year are being rasied again and the e/p of the market is 6% or so versus the 10 year rate of 3.1. Such a divergence, and its increase in the last two or 4 weeks has to be very bullish The information concerning the keys thrown on the table by the owner of the paper to the corn belt faker that one of our own has kindly disseminated to me gives force to my theories of the pernicious influence of the character of a chief executive who would turn on his right hand man.


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