Cisco takes a drop while shareholders live in denial
While the techy giants are doing OK, Cisco moves against the stream and expects a 16% drop in sales for Q1. One surpise to us is the effect of reports on stocks, as earnings reports drop in. Not on Cisco specifically, but over the whole board. Have stockholders not been plugged in on the current market status?
The drop in shares as negative reports come in, reflects the denial factor where you always hope your stock will hold up better against the storm. You might as well be giving the money away – doing a bit of charity will be much more satisfactory than waking up to a hefty loss on report day.
The trick is to understand the signs and trust the total mass of the global market. If the trend is down, you will have a very hard time finding gems in this mess. So where is the money? Too late for this round, but a little gamble on the denial hopes of the joe-stockholder and cash in on the share drop on report days.
So what of the future? Take Nikon as an example. They are already projecting a historic loss for all of 2010. What does that tell you?
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