Bizzare mad mad world of business and stocks - Mercedes-Benz Forum

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post #1 of 6 (permalink) Old 10-20-2004, 05:55 AM Thread Starter
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Bizzare mad mad world of business and stocks

Guess big news yesterday from Minnesota is that 3M missed analysts' expectations by one friggin' penny. This resulted in its stock price falling 5% to around $73.50 before recovering to $76. The final net at the end of the day being a 2% drop.

It's just so damn amazing how one damn cent can cause you to lose over a buck isn't it? The company didn't do poorly. Profits actually rose 17%. Imagine what would happen if they had acutually beat the street by $0.01.

WTF are we becoming? Most people would be damn happy that the company is making money. Not only that, it's making more money than ever. Is our skittish behavior being triggered by memories of a few years back when we had all our eggs in one basket?

Damn... this behavior makes me wanna take away Rupert Murdoch's chef and butler for a month. Seems like we can't appreciate the good things nowadays.

All hail the Sixteen Men of Tain!
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post #2 of 6 (permalink) Old 10-20-2004, 06:41 AM
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RE: Bizzare mad mad world of business and stocks

The problem is that people can't think past three months in time. CEO compensation is tied to quarterly earnings and they have massive stock options that are short-term in nature.

Why do companies lay off employees in droves? It's not to increase productivity (well, it does) but it's to slash payroll costs to boost earnings and make a better quarterly report. The stock rises and the manangement team all profit.

Investors have become "short termers" too. People expect to be making big gains in the equity markets. And truthfully, why not? Risks are high. You should expect to earn more in investing in equities than in fixed-income securities. But, too many people are now in the market that have no idea of how it REALLY works, and their expectations are all wrong. Also, mutual finds mean people invest in things they know little or nothing about.

I'm really trying to see things from your perspective, but I'm having trouble getting my head up my ass
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post #3 of 6 (permalink) Old 10-20-2004, 07:43 AM
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RE: Bizzare mad mad world of business and stocks

Ditto you both. I think it's a function of modern telecomunications. Everybody has the same program, has the same data,follows the same micro number, and uses the same enter button. The potential of an attach to the Internet is huge. Crazy things happen because of the same mechanisims that allow the market to work up to the levels we've come too.
Things can happen like in WWI - on automatic. In 87 - G. Soros put a 1,000 lot market order (huge at that time) into the S&P pit through Shearson (where did they go) knocked it into stops and the market free fell because the program desks had gotten to confy scalping for pennies. At the Bache desk somebody hit enter - didn't get the quick "fill" response that they were used to and nerviously kept hitting enter - we've all done that when it seems the system locks up, right. In a moment like flashbulbs going off they all came back - fill fill - fill fill fill, fill fill, fill fill fill. The desk took over a 200,000,000 hit.
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post #4 of 6 (permalink) Old 10-20-2004, 09:16 AM
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RE: Bizzare mad mad world of business and stocks

I've got a buddy who's an analyst and this stuff drives him up a wall. It wasn't that long ago that they didn't project earnings. They just announced. And you have to remember, all these projected earnings have their genisis in what the companies tell the analyst. Almost all traded companies have a director of investor relations that play the game It's their own fault.

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post #5 of 6 (permalink) Old 10-20-2004, 03:03 PM
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RE: Bizzare mad mad world of business and stocks

It's Bush's fault.
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post #6 of 6 (permalink) Old 10-20-2004, 04:22 PM
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RE: Bizzare mad mad world of business and stocks

Well, in the four years he has held office, the stock market has not gone up one dime. Dow at 10K when he gets in, DOW at 10K now. That doesn't exactly give his economic plan (if he ever had one) the smell
of success.

My self, I think the emphasis on the fear factor of terrorism and the color alerts and all the fake terror warnings we got whenever Bush's poll numbers were down has hurt the economy badly. We really could have used a "There is nothing to fear but fear itself " President - instead we have one that uses fear to achieve his ends. It has hurt the American spirit. Its one of the reasons not destroying Bin Laden was a huge economic as well as political mistake. We should have whacked the guy for closure, and then gotten back to business. Instead, he is like a knife hanging over our heads, and I think Bush did it on purpose. The pies he and his daddy have their fingers in - oil, defense, are getting bigger all the time. Meanwhile, the middle class is getting smaller, and as long as Bush makes us afraid, we will live with it.

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