Analysts v. the Companies

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By throgsnk
August 8, 2001

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Since the SEC precludes Companies from discussing their fortunes with analysts via whispers in smoke-filled rooms opting instead for full disclosure, it makes me wonder where these so-called, self-proclaimed "experts" get their information? The latest barrage designed to tank the semiconductor, equipment, and PC sector comes from CSFB with such phrases as: "Even when a bottom is established, growth from the bottom will be lackluster at best". Wait a second. Says who? Where are the sources of this information? Exactly which OEMs, Their customers, Purchasing Agents, Shoeshine Boy is disseminating this information? Why is it that these "unknown/unnamed sources" are so otherwise closed-mouth but "spill-their-guts" to CSFB at a time coincidentally that contradicts the first positive statements made by a technology company (INTC) in about a year?

The Pundits have unanimously held the position that the Market is a discounting mechanism that "foresees" 6-9 months into the future. However, according to CSFB in today's announcement: "In this climate, investors are wise to wait on the sidelines until there is evidence of an actual demand turn". Well, if we investors wait until "there is evidence of a demand turn", the only investors in the shares will be the ones that CFSB tells before it goes public with the information - assuming that CFSB knows what's it's talking about regarding demand (which, in my view, is a very large assumption indeed).

Another scintillating bit of nebulous advice from CSFB is: "the [typical] metrics used to measure the ebb and flow of the industry do not provide enough evidence to gauge when a rebound will occur or how deep and sustained it will be." What? Excuse me? The "typical" metrics? A deep rebound? I've never heard of a "deep rebound" -- is that anything like a "mountainous trench"?

Well, I'm a firm believer that CSFB's intention in disseminating the ton of rubble isn't to benefit investors -- rather it's just another attempt to drive the price of the shares in semis, equipment, and PC sector into the tank until, a few months hence, CSFB tells us that "the deep rebound" and the "mountainous trench" has run its course.