Analysts at Credit Suisse First Boston found that companies who warn about profits tend to do so more than once. In a remarkable feat of arithmetic and hard work, CSFB analysts have managed to find something that business people have known for a long time.
This is a classic example in businesses of the bath tub effect, when you dip in performance it takes a while to move pieces around the board, alter your market offering and get back on top. The bottom of the bath is the reorganisation period and the sloping sides the time it takes to get into and out of trouble. Will this analytical statement of the obvious lead to a return in momentum funds? (Simply put a momentum fund trades on the principle that if a item has just increased in price, it will continue to do so for the short term, they will tend to trade in and out of stocks fast making small gains over and over again - think about the way brokers played chicken with ever rising prices of dot.com and telecoms stocks during the late 1990s through to 2000).
Thanks to Lawrence at the GLC Limited for this light humour (and remarkably clean language for financial services related humour):
LEAST used phrases in an FX dealing room
- I think my budget is very fair and achieveble this year
- This usd/chf is very liquid today '....
- No thanks , i dont like beer'....
- The bonuses were very generous this year'....
- There are way too many hot looking chicks in this dealing room'....
- Nice fill , and keep a couple of ticks for yourself'....
- My sales desk is fuc*ing brilliant....'
- Our systems are fantastic and work really well'....
- Japanese fx policy makes perfect sense to me....'
- This usd/cad is easy....'
- This hedge fund business is always full amount'...
- The e-platform has never shafted me ...'
- That girl in the backoffice is an absolute genius'...
- Its great that senior management have full understanding of Fx product...'
- Do you mind watching my take profit orders please?
- Hey turn the cricket off ...I was watching bloomberg tv
