Earnings misses give cheerleaders pause

Its dumbfounding to watch a bunch of last week’s cheerleaders do a 180 degree spin and lament the recent earnings misses. While reports have been coming in about 6% better than expected, there have been enough significant misses to make the rah rah crowd nervous:

“Lots of misses. More than we should be having. Raytheon (RTN) misses — huge! Royal Dutch (RD) misses huge! Leapfrog (LF) shouldn’t matter, but it was a gigantic miss. Blockbuster (BBI) and Brinker (EAT) were huge misses. SBC Communications (SBC) was just awful. AT&T (T) was amazing given how horrible the revenue was.

Merck (MRK) truly did stink — I mean, out loud. KLA-Tencor (KLAC). . . Last week I was thrilled with the earnings picture until IBM (IBM:NYSE – commentary – research). This week it’s just the opposite. It is awful. You can’t ignore it, and you can’t pretend it’s not happening.”

Huge Earnings Misses Hit Wall Street
-James J. Cramer, 10/23/2003 10:54 AM EDT

I think it behooves investors to look closely at their holdings; Are your recent gains stimulus/liquidity induced, or are they driven by organic gains the broader economy? The answer to that question may very well be the answer to your buy, sell or hold concerns.

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