Friday, August 12, 2011

Cisco and Nvidia Earnings from the Valley

These are easy ones - sell, sell, sell!

Both have taken advantage of a worthless US dollar to scratch out a quarter. A person could argue that anyone should have made 5% or so on the currency no matter how badly they have performed.

Of course, sometimes the Silicon Valley folks have been known to withhold last-day shipments from one quarter in order to slide them into the next quarter for cosmetic purposes... but neither of these companies would ever do that because they are too professional.

But the worst: both companies gave upward forward guidance in an economic climate where cyclicals have no idea where they are headed. How irresponsible for the widows and orphans who may be purchasing the stock.

And it worked for the companies, at least for some short time, in terms of hiking the stock price temporarily. Maybe for insiders to sell, etc.

It will not work for long. Don't get left out of the short position gains you can have once you understand the situation for these near-term underperformers.