tag:blogger.com,1999:blog-2335748440449035592.post96049974540442316..comments2007-09-18T10:13:50.747-04:00Marknoreply@blogger.comBlogger5125tag:blogger.com,1999:blog-2335748440449035592.post-60581188711135073882007-09-18T10:13:00.000-04:002007-09-18T10:13:00.000-04:00Yep, the spin is 'it's contained' - people always ask why these names are not valued higher, this whole group. Essentially it's impossible to forecast their earnings, whatever they tell you, you have to go with - so many moving parts and for some of them, like Goldman, much of their earnings are from trading so it all depends on how their traders do - but it's not consistent - one quarter they could be great, but that doesn't mean the next they will be great (although Goldman generally has the best traders) - plus it doesn't hurt they have friends in all the right places. Wasn't it convenient that Lehman was able to lower estimates expectations in past 2 weeks to exactly the point where they could beat by a nice margin and signal the all clear? Funny to see this all in action - the gamesmanship.TraderMarkhttp://www.blogger.com/profile/06241756200482130281noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-16734416483549342172007-09-18T09:40:00.000-04:002007-09-18T09:40:00.000-04:00And LEH is the first:<BR/><BR/><I>Expectations were low ahead of the fiscal third quarter earnings report from Lehman Bros. (LEH 58.62). That's why its stock is called higher after the firm reported a 3% decline in net income to $887 million, or $1.54 per diluted share.<BR/><BR/>Analysts had been expecting the firm to post a profit of $1.47, according to Reuters Estimates, so the result is being billed as better than expected. Net revenues were $4.3 billion, up 3% from last year and down 22% on a sequential basis.<BR/><BR/>Despite the credit market turmoil, the firm's book value per common share actually rose to $38.29 from $37.15 in the second quarter and from $32.16 in the prior-year period. <BR/><BR/>The overall report isn't too stellar, but the fact that Lehman Bros. topped estimates and didn't register a sharp decline in earnings sets a good tone ahead of the reports from Morgan Stanley (MS), Bear Stearns (BSC) and Goldman Sachs (GS) later this week. </I><BR/><BR/>Down a lot, but not as much as feared and so the stock rises. Looks likely that the market is feeling the negative news is already priced in, despite the reports of ripples and problems and declining prices to come.msbnoreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-29603597060550072612007-09-17T13:00:00.000-04:002007-09-17T13:00:00.000-04:00that should of read 'so many people ARE forecasting a sell off if makes me wonder'TraderMarkhttp://www.blogger.com/profile/06241756200482130281noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-65352574708863217512007-09-17T12:59:00.000-04:002007-09-17T12:59:00.000-04:00I'm with you. I will leave heavy gambling to those in Vegas. One reason I like the market vs Vegas is you can in theory have some advantage versus the house here. Right now its everyone just guessing. <BR/><BR/>What I could see developing is an 'all clear' scenario... we are ok... draw in people, than the curtain falls ;) <BR/><BR/>So many people are not forecasting a sell off it makes me wonder - I am not sure how many steps ahead people already have baked in. Did they bake in the preFed cut rise? Did they bake in the postFed cut drop? Did they bake in the rise after the fall after the rise of the fall of the rise? lol<BR/><BR/>Judging from the stock, you'd think Goldman Sachs had a great quarter, they report last this week, so the bad news from the others might be seen as "inferior companies" blah blah, everyone gets comfortable and away we go. I think once everyone is pretty comfortable with the market is when things could get hairy. <BR/><BR/>That said, I am still wondering what a 0% Fed funds cut along with 25-50 basis discount cut does to the market. I don't think that is an outlier event although everyone says 25 to 50 fed funds cut.<BR/><BR/>To be a fly on that wall...TraderMarkhttp://www.blogger.com/profile/06241756200482130281noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-61803596607540251702007-09-17T12:13:00.000-04:002007-09-17T12:13:00.000-04:00I was thinking last week and over the weekend about adding to SKF ahead of the reports this week, but there is too much risk in an unknown reaction. I think it's a general assumption that their earnings will be down and the reports themselves will look pretty negative. However, I thought, like you said, about the spin these companies might put in, or the sentiment that if there is something even slightly positive being done by these firms, that investors might default to "exuberance" and suddenly feel like all the negative news has been priced in already, causing an increase. <BR/><BR/>I am personally in agreement that there is just too much unknown and very little way to predict what might happen. I think it's safe to say logic will play little if any role in whatever the market reactions will be this week to the various reports and news.<BR/><BR/>Cash looks good this week.msbnoreply@blogger.com