Kirk's Market Thoughts: 3000 +

Top 1318. Sep 26, 2004 8:50 AM

» Kirk - Sox Killer Ap

.
In response to message posted by noggin:

I am sure a ring tone for men is not far, ahem, behind...

Chest challenged chicks ring in bigger breasts
By Ryann Connell
Staff Writer
September 23, 2004

Some of the silly tunes Japanese pay to download to use as the ring tone for their mobile phones sure have their knockers, but it's for precisely that reason that a well-known counselor is raking it in at the moment, according to Shukan Gendai (10/2).

Hideto Tomabechi -- who first made headlines in Japan almost a decade ago after he cured brainwashed members of the AUM Shinrikyo doomsday cult that unleashed deadly sarin gas on the Tokyo subway system -- claims to have developed a tune for ring tones that promises to increase the breast measurements of those who listen to it.

And Tomabechi's brainchild for better busts has boomed, with chest challenged chicks swarming to transfer data to their own phones.

"I listened to the tune for a week expecting all the time that I was being duped," says Chieri Nakayama, a 19-year-old pin-up model, tells Shukan Gendai. "But, incredibly, my 87-centimeter bust grew to 89 centimeters! It was awesome!"

Mobile phone ring tone tunes, or chakumero as they're called in Japanese, are almost an integral part of the arsenal of Japan's tens of millions of cellular phone users. Each of the big phone companies operates sites where their customers can for a few hundred yen per month download songs they use in place of the blase ring tones pre-installed in the phones. Normally, people select hit songs or TV themes, but Tomabechi's tit tune has hit a raw nerve somewhere, attracting an almost unimaginable 10,000-plus downloads in the first week it was made available, despite the numerous titters.

"Most would think it's a lie, but the techniques involved in the process have been known for some time and are the result of research I carried out in the '80s and '90s," Tomabechi tells Shukan Gendai. "I use sounds that make the brain and body move unconsciously. It's a technique involving subliminal effects."

Tomabechi claims that techniques exist to provoke movement in a certain part of the brain that reacts to sounds and light.

"It's a part of cognitive science. I suppose you could call it a kind of 'positive brainwashing,'" he says. "Sound waves travel in patterns that can be properly re-played."

It's an old adage that many illnesses are all in the mind, but if the counselor's claims are correct, the key to having a huge set of breasts could be the same. Tomabechi says he's already got plans on the drawing board for ring tones aimed at improving memory, increasing attractiveness for the opposite sex, making hair sprout and quitting cigarettes.

Even if the rockmelon ring tone doesn't prove to be as effective as its inventor claims, what can't be denied is its success on the chakumero charts.

"We offer loads of chakumero for sale at 300 yen a month and the tune promising huge breasts would have to be in our top 10 at least. It's doing far better than we ever expected," Yuichi Tsujimoto, a spokesman for Mediaseek, which offers Tomabechi's tune online, tells Shukan Gendai. "We haven't done any advertising for it, so I suppose the tune's success has come about through word of mouth. We've even received mail from one user who said they listened to the tune every night before going to sleep and it made her tits bigger."

--------------------------------------------------------------------------------

WaiWai stories are transcriptions of articles that
originally appeared in Japanese language publications. The Mainichi Daily News cannot be held responsible for the contents of the original articles, nor does it guarantee their accuracy. Views expressed in the WaiWai column are not necessarily those held by the Mainichi Daily News or Mainichi Newspapers Co.

-- posted by Kirk

Top 1319. Sep 26, 2004 9:19 AM

» Jas_Jain - For the Past Six Years

For the Past Six Years

I am sick and tired of Kirk’s countering bearish arguments by pointing to his Model Portfolio’s performance for the past Six Years.

What are the facts about the Past Six Years?

NDX has returned next to nothing and SPX has returned 2% per year including dividends. From their July’98 highs, both, the NDX and SPX, are down in price.

CASH (3-MONTH T-BILLS ROLLED OVER), GOLD, EUROPEAN CURRENCIES, AND *** USTs*** -- ALL THE INVESTMENTS THAT I RECOMMENDED BACK THEN -- HAVE ALL OUR-PERFORMED THE SCAM MARKET FOR THE PAST SIX YEARS. Yes, I speculate on the short side of the Scam market, but I have not recommended others to do that. My advise, for the Past Six Years, has been conservative and has paid of quite well.

Grated that Kirk has proven to be a trading genius in his Model Portfolio, but he could have made lot more money by trading on both sides if he can time the intermediate-term highs and lows reasonably well. KIRK’S GENERAL BULLISHNESS ABOUT THE SCAM MARKET HAS BEEN PLAIN WRONG.

Let us not confuse one’s trading performance with one’s views on the Scam Market and the economy. We shall see how well Kirk’s Model Portfolio does in March’06 for the Past Six Years.

The richest people in America own lot less Scams than they did Six Years ago! Smart people have been selling relentlessly for the Past Six Years, lot more than the Six Years before that or before that. Guess who has been on the other side of their trades? You guessed it right – the Scam Lovers.

Jas

-- posted by Jas_Jain

Top 1320. Sep 26, 2004 12:05 PM

» Normxxx - Re: Re: Re: Re: Sad But Funny

In response to message posted by allancoleman:

Don't know how you could have missed it-- he has been making a lot of noise lately about it!

I believe he has said elsewhere that the only thing limiting the amount of Berkshire's foreign investments is their Charter

Warren Buffet is bearish on the dollar
http://www.rediff.com/money/2004/mar/15b... | March 15, 2004

Ace American investor Warren Buffett talks about his investment strategies.

Warren Buffett's letter to shareholders of his investment firm, Berkshire Hathaway, is one of the most eagerly awaited statements among investors across the globe as it records his investment strategies and views on issues haunting corporate America.
Buffett denies $1bn bid buzz

In this year's letter to shareholders Buffett condemned mutual fund companies and greedy chief executive officers and questioned the role of independent directors in companies and mutual fund boards. Buffett reaffirmed his bearish view on the dollar and said he is loading up on foreign currency.

Excerpts from the 22-page letter:

Investments
We bought some Wells Fargo shares last year. Otherwise, among our six largest holdings, we last changed our position in Coca-Cola in 1994, American Express in 1998, Gillette in 1989, Washington Post in 1973, and Moody's in 2000. Brokers don't love us.
We are neither enthusiastic nor negative about the portfolio we hold. We own pieces of excellent businesses – all of which had good gains in intrinsic value last year – but their current prices reflect their excellence. The unpleasant corollary to this conclusion is that I made a big mistake in not selling several of our larger holdings during the great bubble.
In 2002, junk bonds became very cheap, and we purchased about $8 billion of these. The pendulum swung quickly though, and this sector now looks decidedly unattractive to us. Yesterday's weeds are today being priced as flowers.
We've repeatedly emphasised that realised gains at Berkshire are meaningless for analytical purposes. We have a huge amount of unrealised gains on our books, and our thinking about when, and if, to cash them depends not at all on a desire to report earnings at one specific time or another.

During 2002 we entered the foreign currency market for the first time in my life, and in 2003 we enlarged our position, as I became increasingly bearish on the dollar. We have – and will continue to have – the bulk of Berkshire's net worth in US assets. But in recent years our country's trade deficit has been force-feeding huge amounts of claims on America to the rest of the world. For a time, foreign appetite for these assets readily absorbed the supply. Late in 2002, however, the world started choking on this diet, and the dollar's value began to slide against major currencies. Even so, prevailing exchange rates will not lead to a material letup in our trade deficit. So whether foreign investors like it or not, they will continue to be flooded with dollars. The consequences of this are anybody's guess. They could, however, be troublesome – and reach, in fact, well beyond currency markets. As an American, I hope there is a benign ending to this problem.

Then again, perhaps the alarms I have raised will prove needless: Our country's dynamism and resiliency have repeatedly made fools of naysayers. But Berkshire holds many billions of cash-equivalents denominated in dollars. So I feel more comfortable owning foreign-exchange contracts that are at least a partial offset to that position.
When we can't find anything exciting in which to invest, our 'default' position is US Treasuries, both bills and repos. No matter how low the yields on these instruments go, we never 'reach' for a little more income by dropping our credit standards or by extending maturities. Charlie and I detest taking even small risks unless we feel we are being adequately compensated for doing so. About as far as we will go down that path is to occasionally eat cottage cheese a day after the expiration date on the carton.

Corporate governance

In judging whether corporate America is serious about reforming itself, CEO pay remains the acid test. To date, the results aren't encouraging. A few CEOs, such as Jeff Immelt of General Electric, have led the way in initiating programs that are fair to managers and shareholders alike. Generally, however, his example has been more admired than followed.

It's understandable how pay got out of hand. When management hires employees, or when companies bargain with a vendor, the intensity of interest is equal on both sides of the table. One party's gain is the other party's loss, and the money involved has real meaning to both. The result is an honest-to-God negotiation.

But when CEOs (or their representatives) have met with compensation committees, too often one side – the CEO's – has cared far more than the other about what bargain is struck. A CEO, for example, will always regard the difference between receiving options for 100,000 shares or for 500,000 as monumental.

To a comp committee, however, the difference may seem unimportant – particularly if, as has been the case at most companies, neither grant will have any effect on reported earnings. Under these conditions, the negotiation often has a 'play-money' quality.

Overreaching by CEOs greatly accelerated in the 1990s as compensation packages gained by the most avaricious – a title for which there was vigorous competition – were promptly replicated elsewhere.

The couriers for this epidemic of greed were usually consultants and human relations departments, which had no trouble perceiving who buttered their bread. As one compensation consultant commented: "There are two classes of clients you don't want to offend – actual and potential."

In proposals for reforming this malfunctioning system, the cry has been for 'independent' directors. But the question of what truly motivates independence has largely been neglected.

In last year's report, I took a look at how 'independent' directors -- as defined by statute -- had performed in the mutual fund field. The Investment Company Act of 1940 mandated such directors, and that means we've had an extended test of what statutory standards produce.

In our examination last year, we looked at the record of fund directors in respect to the two key tasks board members should perform -- whether at a mutual fund business or any other. These two all-important functions are, first, to obtain (or retain) an able and honest manager and then to compensate that manager fairly.

Our survey was not encouraging. Year after year, at literally thousands of funds, directors had routinely rehired the incumbent management company, however pathetic its performance had been.

Just as routinely, the directors had mindlessly approved fees that in many cases far exceeded those that could have been negotiated.

Then, when a management company was sold -- invariably at a huge price relative to tangible assets -- the directors experienced a 'counter-revelation' and immediately signed on with the new manager and accepted its fee schedule.

In effect, the directors decided that whoever would pay the most for the old management company was the party that should manage the shareholders' money in the future.

Despite the lapdog behavior of independent fund directors, we did not conclude that they are bad people. They're not. But sadly, 'boardroom atmosphere' almost invariably sedates their fiduciary genes.

On May 22, 2003, not long after Berkshire's report appeared, the chairman of the Investment Company Institute addressed its membership about 'the state of our industry.'

Responding to those who have "weighed in about our perceived failings," he mused, "It makes me wonder what life would be like if we'd actually done something wrong."

Be careful about what you wish for. Within a few months, the world began to learn that many fund-management companies had followed policies that hurt the owners of the funds they managed, while simultaneously boosting the fees of the managers.

Prior to their transgressions, it should be noted, these management companies were earning profit margins and returns on tangible equity that were the envy of corporate America. Yet to swell profits further, they trampled on the interests of fund shareholders in an appalling manner.

So what are the directors of these looted funds doing? As I write this, I have seen none that have terminated the contract of the offending management company (though naturally that entity has often fired some of its employees). Can you imagine directors who had been personally defrauded taking such a boys-will-be-boys attitude?

To top it all off, at least one miscreant management company has put itself up for sale, undoubtedly hoping to receive a huge sum for 'delivering' the mutual funds it has managed to the highest bidder among other managers. This is a travesty.

Why in the world don't the directors of those funds simply select whomever they think is best among the bidding organisations and sign up with that party directly? The winner would consequently be spared a huge 'payoff' to the former manager who, having flouted the principles of stewardship, deserves not a dime.

Not having to bear that acquisition cost, the winner could surely manage the funds in question for a far lower ongoing fee than would otherwise have been the case. Any truly independent director should insist on this approach to obtaining a new manager.

The reality is that neither the decades-old rules regulating investment company directors nor the new rules bearing down on corporate America foster the election of truly independent directors.

In both instances, an individual who is receiving 100 per cent of his income from director fees -- and who may wish to enhance his income through election to other boards -- is deemed independent. That is nonsense.

The same rules say that Berkshire director and lawyer Ron Olson, who receives from us perhaps 3 per cent of his very large income, does not qualify as independent because that 3 per cent comes from legal fees Berkshire pays his firm rather than from fees he earns as a Berkshire director.

Rest assured, 3 per cent from any source would not torpedo Ron's independence. But getting 20 per cent, 30 per cent or 50 per cent of their income from director fees might well temper the independence of many individuals, particularly if their overall income is not large. Indeed, I think it's clear that at mutual funds, it has.

Let me make a small suggestion to 'independent' mutual fund directors. Why not simply affirm in each annual report that "(1) We have looked at other management companies and believe the one we have retained for the upcoming year is among the better operations in the field; and (2) we have negotiated a fee with our managers comparable to what other clients with equivalent funds would negotiate."

It does not seem unreasonable for shareholders to expect fund directors -- who are often receiving fees that exceed $100,000 annually -- to declare themselves on these points. Certainly these directors would satisfy themselves on both matters were they handing over a large chunk of their own money to the manager. If directors are unwilling to make these two declarations, shareholders should heed the maxim "If you don't know whose side someone is on, he's probably not on yours."

Finally, a disclaimer. A great many funds have been run well and conscientiously despite the opportunities for malfeasance that exist. The shareholders of these funds have benefited, and their managers have earned their pay.

Indeed, if I were a director of certain funds, including some that charge above-average fees, I would enthusiastically make the two declarations I have suggested.

Additionally, those index funds that are very low-cost (such as Vanguard's) are investor-friendly by definition and are the best selection for most of those who wish to own equities.

I am on my soapbox now only because the blatant wrongdoing that has occurred has betrayed the trust of so many millions of shareholders. Hundreds of industry insiders had to know what was going on, yet none publicly said a word.

It took Eliot Spitzer, and the whistleblowers who aided him, to initiate a housecleaning. We urge fund directors to continue the job. Like directors throughout corporate America, these fiduciaries must now decide whether their job is to work for owners or for managers.

The content of this message is not to be construed as constituting market or investment advice. It is intended for educational purposes only. Individuals should consult with their own advisors for specific investment advice.

-- posted by Normxxx

Top 1321. Sep 26, 2004 12:24 PM

» Kirk - Re: Warren Moving Money OUT of the U.S.

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In response to message posted by Normxxx:

Last I heard, Warren was moving his money outside of the U.S. as fast as he could.

Really? Did he sell Fruit of the Loom, GEICO, Shaw Industries, Sees or GenerRe? What about his publicly traded holdings where you can’t blame lack of buyers. Did he dump these too?

* American Express Company
* The Coca-Cola Company
* The Gillette Company
* H&R Block, Inc
* M&T Bank
* Moody’s Corporation
* The Washington Post Company
* Wells Fargo & Company

See: http://dir.yahoo.com/Business_and_Econom...

Or are you just talking about where he is looking to invest his spare cash today to diversify?

FWIW:

Buffett wrote in his 1996 annual report "inactivity strikes us as intelligent behavior. Neither we nor most business managers would dream of feverishly trading highly profitable subsidiaries because a small move in the Federal Reserve's discount rate was predicted or because some Wall Street pundit had reversed his view on the market. Why, then, should we behave differently with our minority positions in wonderful businesses?"

Buffett seems to constantly argue against what many consider nonsense, trading in and out of the market on stuff like "seasons." Do you quote Buffet when it suits you and ignore him when it doesn't?

“Most investors, both institutional and individual, will find that the best way to own common stocks (‘shares’) is through an index fund that charges minimal fees. Those following this path are sure to beat the net results (after fees and expenses) of the great majority of investment professionals.”
Warren Buffett – Berkshire Hathaway Annual Report 1996

As for me, I hope I didn’t give you the impression I don’t have investments outside the US. I am actually on the high end of my international range these days with over 20% of my personal portfolio outside the US. One of my top gainers in dollars and percent YTD has been a small cap Canadian Natural Gas driller.

Diversification is good. smile

-- posted by Kirk

Top 1322. Sep 26, 2004 12:42 PM

» allancoleman - Re: Re: Re: Re: Re: Sad But Funny

In response to message posted by Normxxx:

Normxxx , appreciate the update on Warren . i must have missed it with all my real estate trips this summer and fall here in alaska . still have more to do in that investment sector before leaving for hawaii the end of october . just in time for Sy's signal maybe .

i like Warren for his honesty when he says he doesn't invest in things he doesn't understand . and from your post , he is honest about his mistakes and what direction he is taking to correct them .

-- posted by allancoleman

http://www.thegreatbustahead.com/

Top 1323. Sep 26, 2004 1:14 PM

» Normxxx - Re: Re: Warren Moving Money OUT of the U.S.

In response to message posted by Kirk:

Wish it were as simple as investing outside the U.S., but I am convinced that if the dollar crashes and our economy goes, we take the rest of the world with us! Gold may survive, but then again, it may not. And you can get killed on the way to $3000 gold (unless you can figure a safe way to stash the physical stuff)!

<img Align="Left" src="http://www.thegreatbustahead.com/chart.g...">But if you believe this guy, looks like we may have another 10 good years, give or take!

-- posted by Normxxx

Top 1324. Sep 26, 2004 1:20 PM

» Jas_Jain - Re: Re: Warren Moving Money OUT of the U.S.

In response to message posted by Kirk:

--

"I hope I didn’t give you the impression I don’t have investments outside the US. I am actually on the high end of my international range these days with over 20% of my personal portfolio outside the US. One of my top gainers in dollars and percent YTD has been a small cap Canadian Natural Gas driller."

Canada doesn't count as international diversification. You are extremely parochial in your approach with most of your networth tied to Silly.con Valley.

"Diversification is good."

Yeah, it is good but you don't know much about it. Most of your assets are dollar denominated. No? When Silly.con Valley goes bust, as it must, you will really learn what real diversification is all about. Until then you will keep justifying your current holdings.

Jas

-- posted by Jas_Jain

Top 1325. Sep 26, 2004 1:36 PM

» Jas_Jain - Only a Fool Tries to Time the Great Depression or a Crash

In response to message posted by Normxxx:

NormXXX,

Whoever this guy is, who is predicting the timing of the Greater Depression based on technical analysis, is a fool and those who rely on such timing to get out of the Scam Market or other aassets that will suffer greatly is a fool too.

It is better to be early than late!

Jas

-- posted by Jas_Jain

Top 1326. Sep 27, 2004 7:17 PM

» Kirk - Wonderful World of Estimate Creation

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Inside the earnings game
27 Sep 2004

Here's a real-life glimpse into the wonderful world of estimate creation.

http://dai.investor.reuters.com/Article....

Marc Gerstein
Director of investment research
Reuters.com

Here we go again. Another earnings season is upon us, and we know what that means: lots of worrying or rejoicing as companies miss or beat analyst expectations. I think this "game" is downright ridiculous, but that's a topic for another time. Today' I'm going to present a different vantage point. I'm going to give you a glimpse into the real-life forecasting process. If you keep it in mind as the earnings-season news-flow comes your way, you'll be far better equipped than most to recognize when you should react and when you should just sit back and munch on popcorn while you watch the earnings nuts run in circles.

True story #1

I started my first job as a securities analyst two months before finishing my MBA studies. So I had a slight work-by-day- school-at-night overlap. During that last term, one of the courses I took was "working capital management."

The first question on the final exam asked for a brief explanation of how we would go about forecasting power demand for an electric utility. My gut reaction was "Wow, I'll ace this one." That was because I faced that exact same issue earlier that day at work, when I had to prepare estimates for a utility.

Then, reality struck and I realized I would not be able to apply my actual experience, because if I did, I'd wind up with the following one-sentence answer: "Call the company and ask." I wanted a good grade, so instead of telling the truth, I babbled on about something called the Box-Jenkins method.

It worked. I got a good grade. But that was the last time I thought about Box-Jenkins until now, and today, I have no recollection of any aspect of the method. I did, however, continue to cover utilities for a period of time and did OK with my forecasting approach.

True story #2

By this time, I had become pretty experienced in security analysis. I was not only covering stocks, but I was also serving as an assistant research director, a job that included training, supervision, and evaluation of other analysts.

One day, I got a call from Michael, the director of investor relations as Acme (the names are fictional, but they are proxies for a specific real-life person at a specific real-life company) telling me a new CFO just came on board, and that he wanted to jump feet first into the company's relationship with the investment community. So he asked Michael to call the analysts and ask them to submit their earnings models. That's why Michael was calling me.

"Michael," I said. "What do you want me to submit? My model is I ask you!"

Then, I hesitated. Was I missing something? Was I dogging it? I quickly followed up by asking him what the other analysts were doing. His answer: "They just laughed."

By the time the new CFO reached me in his rounds of analyst meetings (at a Manhattan steak house that has probably contributed much to making the arterial stent market as vibrant as it is today), he was on board with the investment community's approach to forecasting Acme's earnings. So it was tag-team Q&A.

Estimates at large

All companies are different as are all analysts. So not every situation is exactly like my early run with utilities or my coverage of Acme. But with all the estimates I've prepared in my day (too many to count up), there are some common themes.

Asking companies is a vital part of the process.

The details change. Years ago, you trembled before trying to subtly hint at the question. Later on, you led by asking if companies commented on analyst estimates. Eventually, I switched and just said, "I'm looking at such-and-such for the quarter" figuring that if they thought the number was out of whack, they'd at least hint that I should consider refining some assumptions. That led to the guidance era where companies became more overt in their coaching with evolution toward blatant spoon-feeding. Regulation FD and conference calls came later and formalized a lot more of the process. But through it all, even now, analysts remain very much dependent on what they can extract from companies.

We like to think of analysts as industry experts who comb through trade data, interview suppliers, talk to customers, visit distributors, interview not only top bass but employees, and so forth. Forget it. Most investors (even institutions), however much they may think they want that sort of thing, would pass out if confronted by how much it would cost to pay for research like that.

So what about asking?

Let's accept the practical realities that analysts, one way or another, subtly or bluntly, need to depend heavily on what companies tell them. Is that good, bad, or neutral?

We may fear the worst, that companies might mislead. Back when I started, we worried all the time about that. Often, with some outfits, after I got a sense of the number they wanted me to publish, I'd chop it by a certain percent before using it. Experienced analysts felt comfortable assigning different BS factors to what different companies were saying or implying.

As the 1980s progressed and the market became increasingly institutional and as investment research became increasingly professionalized companies began to notice something. BS had a short shelf because every quarter, they had to suck it in and report the actual numbers, and the market reacted badly if the reported results failed to measure up to the BS.

Over the years, we've come to learn that a some companies solved this dilemma by faking the numbers so they could prolong the shelf life of BS. But actually, those were the exceptions. Most firms pursued a two prong strategy: (1) They reduced the BS and got more truthful. (2) They used as much discretion as formal accounting standards allowed in order to paint the best picture that was legally permissible. There is a third approach: exaggerating to the downside so you can beat expectations, but that can extract a big credibility cost over time and backfire if analysts start using BS factors to publish overly optimistic numbers that might later produce negative surprises.

Today, after big publicity around the small number of corporate outlaws who went to far, a lot of companies throttled back to more of #1 and less of #2.

Generally, this should leave us feeling OK about the status quo. We're getting reasonable quality information from those who ought to know, company insiders. Better still, Regulation FD mandates that we all get it at the same time. What could be better?

Still flawed

No matter how sincere and truthful companies may be in guiding, and no matter how skilled analysts may be in framing questions and interpreting answers, there's still a big cloud over this whole process. All participants are human, meaning, none of them can know the future.

Yes, company insiders do have superior knowledge of their businesses. But even to them, many answers depend on things they cannot know: interest rates, capital spending trends, consumer spending, energy prices, and so forth. When they give guidance, they aren't drawing straws. They make assumptions based on reasonable forecasts. The problem: when it comes to getting core big-picture forecasts, they turn to the same sources Wall Street uses!

Now, do you see why so many were caught by surprise by Intel's recent sales guidance? This stuff is hard, even for Intel brass.

But you may say, Intel is a tech company. That's really hard.

I'll give you that. So how about Colgate Palmolive? They make toothpaste and detergent and so forth. When the chips are down (sorry about the pun) that's not much, if at all, easier than microprocessors.

What can we do about all this?

If you're a typical individual investor, I hope you're feeling good.

What you thought would be a terrible disadvantage, your inability to do estimates or schmooze with company insiders, really isn't such a big disadvantage after all became those who think they're so good at this are really up on Cloud 9.

You, as an individual, are actually better off. You don't have to waste time and energy and incur stress pretending you can do this stuff, or worse, trying to convince paying clients you can. That means you can watch all the earnings season events with a calm, clear head.

Please don't take this to be an indictment of analysts, institutional money managers, and so forth. Every profession has some losers, but on the whole, we're talking about a group of very smart, hard working, people. (Seriously!) In their calm moments, they know darn well it's a silly game. Similar situations exist in other professions too, as many readers probably know full well. The problem is that for professional investors, their livelihoods depend on their playing this earnings game. When you have that much day-to-day pressure, clarity can diminish. (There's a reason why I did not write articles like when I was working for a company that expected me to prepare and publish estimates!)

As to what you can do about earnings season, the answers sit back and watch. With each item of news that impacts a stock you own or one you're thinking about, ask yourself how reasonable it is for the Street to assume what it assumes. Sometimes, you'll find opportunities to by and sell with the crowd. But if you've ever had contrarian inclinations, earnings season is the time when you get more good opportunities than usual to ac on them. Even if you don't have the temperament to lean against the wind, you can still do nothing. You may miss a few quick opportunities, but on the hole, clear-headedness will produce more-than-enough good decisions (a decision to hold or avoid is every bit as valid as a decision to buy or sell) to offset a few missed trades.

-- posted by Kirk