The Mood of the H&Q Conference? It's the Mood of the Market

These tech execs and investors respond like traders to the swings in the equity markets. Today, they're glum. But tomorrow?

Everyone who's not at an investment banking conference wants to know the "tone" of the conference. This question always bugs me. As a rule, portfolio managers running around in the hallways of a conference haven't got a clue about the tone. The not-so-startling secret is that when the market's moving up, the tone is good. When the market is moving down, the tone is bad. Big-shot investors are a trailing indicator, not a leading one.

This week's Chase H&Q conference is no exception. A panel of buy-side investors couldn't have been more glum, with Essex Investments Chief Investment Officer Joseph McNay counseling prayer and Roger McNamee of Integral Capital Partners wondering aloud if it is time to panic.

Tone is tough to assess -- no matter how many times you ask.

Cisco's Brand Value

A quick between-the-sessions check of email brought a missive from Sharon Dale, associate professor of art history at the Behrend College at Penn State-Erie (I love getting finance-oriented emails from art-history professors!). Dale, among others, wrote in about Cisco Systems (CSCO). She's a Cisco fan and professes her "tremendous respect for the way that Cisco handles acquisitions," a common theme among readers who believe that Cisco will not run into accounting problems if pooling of interest merger accounting goes away.

"I was, however, a bit alarmed about [Cisco] when it rolled out those [TV] commercials," she writes. "Often," the professor lectures, "as was the case with Tyco (TYC) and Knight-Trimark (NITE), a new advertising push is an early warning about declining earnings."

I don't know about that. Ads can be a positive indicator, too. A good gauge of how Siebel Systems (SEBL) was feeling about its quarter used to be the way the software maker bought big, national print ads in the waning days of the period. The splurge implied that Siebel wasn't concerned about making its quarterly numbers.

You can debate the value of TV advertising by tech companies that don't cater to consumers. But Mike Lehman, chief financial officer of Sun Microsystems (SUNW), told the Chase H&Q audience on Monday how Sun's "We put the dot in dot-com" ads worked for them. Lehman says that Sun President Ed Zander got a call from Mohamed Al Fayed, chairman of famed retailer Harrods (and father of Dodi Al Fayed, who was killed in the car crash with Princess Diana), when the flamboyant merchandiser wanted to get Harrods wired. Sun got the call because of the dot campaign, Lehman reported.

Is Dale right? Does Cisco's ad campaign presage its fall? Add it to the list of nits critics will pick about the company that's on the top of the heap.

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