Re: [CANSLIM] Earnings

From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] Earnings
Date: Tue, 30 Apr 2002 00:18:15 -0400

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as the CNN excerpt I posted earlier tonight indicates, general consensus
seems to be that there would be a spike in the economy, which we seem to
have gotten in Q1, followed by a much lower, but still growing, economy for
the rest of the year.

Appears to me that the companies / industries that either reacted quicker to
the slowing economy, or traditionally just don't maintain much inventory, or
were more aggressive in clearing the excess inventory, are already beginning
to rebuild the inventory. But others are still reducing inventory, altho at
a much slower rate.

Business appears reluctant to seriously rebuild inventory until they have
concrete proof of existing and continuing consumer demand. Same goes for
increasing employment. I think that is good, for now. If we do not get
sustained consumer spending, even at a low rate, then inventories don't
build to dangerous levels again. And if consumer spending continues, then we
reach a point where inventories must be replenished more quickly, and could
be the spark that gets us back into the 3.5% to 4.5% growth rate.

Tom Worley
stkguru@bellsouth.net
AIM: TexWorley
- ----- Original Message -----
From: <Spencer48@aol.com>
To: <canslim@lists.xmission.com>
Sent: Monday, April 29, 2002 2:01 PM
Subject: Re: [CANSLIM] Earnings


Tom:

     Perhaps you can (and will) explain this:  I understand that IBD
concludes that a big part of the reason GDP was up so much in the 1st
quarter
is less that the economy is getting as strong as the 5.8% would indicate,
but
that inventory reductions were lower.

     Does this mean that companies are replenishing inventories to what they
were duing the recession:  because the strong consumer sales reveal that
there will be as much (but not more) consumer demand as in the recession?

     IBD seems to be saying that Companies will not replenish inventory
because they feel that consumer demand will not be as strong as the recent
GDP indicates.  Is that the correct conclusion as to why a 5.8% increase in

GDP is not as good as it sounds?

jans



In a message dated 4/29/2002 10:08:59 AM Eastern Daylight Time,
stkguru@bellsouth.net writes:

<< GDP for the Q1 was up for a variety of reasons, one of which was that
 consumer sales remained strong, but a second, and more significant one, was
 that inventory reductions slowed appreciably. >>

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