The Significance of Raising the Bar
When a company issues a quarterly report, it then presents expectations for the future. In the New Economy, a company that sits still, or doesn't raise the bar, gets pummeled. But a company that raises the bar, or sets new, higher expectations, is a company on the move.
The bar was raised high. No matter that BEA Systems may have just been conservative, if that bar doesn't go up, there is all heck to pay.Why does this matter? Because it is quite different from the old paradigm, which said that if a company beat the "whisper number," its stock went up. That went out of fashion as a primary method when CNBC began reporting the whisper number. Funny thing about whisper numbers. When they are shouted, they are no longer whispers. The difficult thing for fundamental, nonchartist individual investors is that you can't find if the bar was really raised unless you are on those conference calls, many of which are closed. That these key sessions, where major material information is released, including how high the bar has been raised -- or worse, whether it has been lowered -- are closed is such a fundamental injustice as to be nothing but wrong. Get used to this phrase. I have tried avoiding its use because jargon doesn't illuminate. But it is being used way too often not to give it to you as a piece of the puzzle. Random musings: Don't forget to fill out our broker survey. This one has heft to it, and we need your input. We are bent on creating the largest online survey ever. ... MicroStrategy (MSTR) gets hit with a negative Forbes article and then issues a secondary. Probably set up for a run after those whackings. ... Great article about false negatives today in the right-hand column of The Wall Street Journal. ... Tip-of-the-chapeau department: My hat is off to James Padinha, who correctly predicted the Pimco rally (see Heard on the Street today in the C section of the Journal) ahead of its occurrence. Could have saved desks billions. There is no love between us, but you have to praise a home run call like that.
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