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11/09/2005
Hubris

I am always on the lookout for hubris in myself and the fake kind in the Nebraskan and the overt kind in the West Virginian's company that reports today after the close with its famous virtual close that enables them to come up with a report just nine calendar days after the end of a quarter. Today's estimate is not the round 25 cents a share, but 24 cents. However, the company has beaten estimates in the last five quarters that I have ready data on and I would estimate it has done so for the previous eight in a row.

It used to be that when the company reported, the stock went on a tear. For example, the stock rose 24% after the May 7, 2002, report and 8% after the Aug. 6, 2002, report. But day-after performance has suffered since those glory days:

           1-day    2-day       1 day        2-day
date       perf(%)  perf(%)     Naz(pts)    Naz(pts)
11 06 02     -5     - 3          -40         -60
 2 04 03      0       0.3        - 6           0
 5 06 03     -3     - 4          -13         -34
 8 05 03     -6     - 7          - 2           4
11 05 03      5       2            6          -8
 2  3 04     -9     -10          -24         -20
 5 11 04     -1     - 2            3          -7
 8 10 04    -11     -13          -10         -28
11 09 04     -7     - 5          - 4          14
 2 08 05     -3     - 4          -21         -23
 5 10 05      2       3            7           4
 8 09 05     -7     - 8          -12         -13
 av          -4     - 4          - 9         -13

The tabulation shows clearly that "virtual closing time" has increased in recent years. Also, a general revulsion appears to have developed toward the reports and/or the verbiage accompanying the reports, especially the putting-in-perspective and anticipations for the future. Let us hope that a similar revulsion does not ensue after the close today.

However, a warning: To see this data, I asked the Minister of Non-Predictive Studies for his good work and data, and he was quite euphoric, even interrupting his tennis game to provide same.

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