COMMENTARY -- Thursday ramblings:
So let's give the regulatory body credit where credit is due. Commissioners just approved a rule requiring brokers to detail quality of execution data. It's long overdue; trade quality and speed -- not commission fees -- are the most important reasons to choose an broker. Unfortunately, until now investors haven't had any quantifiable data to judge the performance of, say, E*Trade (Nasdaq: EGRP) versus Charles Schwab (NYSE: SCH).
Brokers will complain about the logistical problems involved with collecting and distributing the information. But everyone has to do it, so no one will have an advantage. Kudos to the SEC for mandating it.
FD for the most part seems to have had a positive effect for information sharing, despite my aforementioned skepticism. If nothing else, CFOs are more specific in their financial guidance on conference calls than they used to be.
Unfortunately, the latest FAQ for FD has one troublesome element:
"May an issuer provide material nonpublic information to analysts as long as the analysts expressly agree to maintain confidentiality until the information is public? Yes."
Analysts are subject to prosecution under insider trading laws if they violate a confidentiality agreement. Whatever.
Why feed information to someone if you don't expect them to act on it? That's what analysts do -- they collect data and disseminate advice based on it. Only ostriches would believe an analyst who gets ahold of "material" information won't find a way to use the data.
Picture this: Big Tech Company slips Bob Analyst information about increased orders for BTC products. Bob calls BTC customers to confirm. Bob tells his clients to buy BTC shares, and the following day cites "conversations with BTC customers" in his publicly-released upgrade report. No one would be able to prove the tip originally came from Big Tech Co.
Least of all the SEC.
"In the end, you have to say, 'Who are our customers familiar with and who are they comfortable with?'" said Leo Suarez, IBM's head of product marketing for mobile systems. "Many of our customers are large enterprises. ... If you tell them I'm switching off Intel, which is the predominant processor, that results in a lot of consternation."
That was a large part of IBM's rationale for going with Intel rather than Transmeta (Nasdaq: TMTA) for the upcoming ThinkPad 240. Suarez pointed out to reporters that companies need a strong reason to switch brands.
Suarez's comments also underscore the enormous resources at Intel's disposal; only eight months after Transmeta revealed itself to the world, Intel had a comparable product designed. And the chip giant's well-documented high-end production problems shouldn't be a factor here, since low-power laptops aren't a volume market like desktop PCs.
Will AMD have a decent-or-better fourth quarter? I'm sure it will, but that's never a reason for a 30-day shot.
On the other hand, I'm reasonably happy with this AMD-powered Gateway I bought last week, so I can't complain about the company entirely. I just wouldn't buy the stock right now, not until I see signs of an upward climb. 22GO>