"yep, I agree. CEOs and CFOs of chip companies have been notorious for lies; although they mention their ever-optimistic forecasts in such a manner that no one can sue them in court for fabrication.
INTC and AMAT are amongst the worse."
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podstock....
Hmmm... I cannot agree with that assessment as it overstates what generally happens with the likes of INTC and AMAT.
The Taiwanese foundries, in my opinion, are guilty of exactly what you say - they give misleading forecasts knowing that they are hopelessly out of line with reality. They have done this for so long that those who have followed the industry closely for a long period of time know better than to place any credence at all in their forecasts.
INTC, AMAT and the other chip and equipment companies mislead investors but in a much more subtle way. My experience in listening to their conference calls over the years is that if the investor listens closely enough, the bad news is there and often in detail, but it is then followed by platitudes such as "we are hoping that ......" or "we normally see ......" that the unaware (including most analysts) understand to be solid forecasts that good news is on the horizon - but that is not the case nor is it what the CEO said. The CEO's have found over time that their stocks will be rewarded by adding such expressions of hope in their presentations so they continue to do so. Misleading, yes, but technically not a lie, just expressing a hope.
In reality, the CEO's or whoever is making the presentation never said the optimism was backed up with any basis in facts, it is only their HOPE that things will pick up before long. The media, the analysts, and the investors all end up being wrong by listening to the expressions of HOPE rather than all the fundamental problems and difficulties that the CEO also talked about (sometimes in great detail) during the conference call. As long as the stocks are rewarded by using that ruse, the CEO's will continue to do so.
The other pitfall that eludes most investors when listening to conference calls is to not recognize that the company is never going to tell you that things are going to hell in a handbasket even when that is what is happening. They will always present the facts with the best possible spin on them without lying. The companies are also not likely to tell investors bad news that is only likely to happen - they will only tell the bad news that they are fairly certain will happen. That is often a big difference and in each case it is up to the investor to read between the lines with a bit of common sense - when a company is laying people off, closing facilities, and slashing their ability to produce, it is not because they see good times "just around the corner." Listen most carefully to what the company does, not just to what it says.
AMAT's recent warning, earnings report, conference call, layoffs, and plant closings all send as clear a message as could possibly be sent that things are really bad and that not only are there zero signs of any improvement in the sector, things are getting worse. If the analysts, media and investors ignore all of that and choose to believe instead the expressions of hope, that is their own fault and nothing to blame Morgan for.
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