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Hey Rick,

Thnking out loud...

just because a company doesn't put up softball projections they know they'll beat by a penny doesn't mean that the estimates and whisper numbers won't be out there, widely circulated. What's the difference?

I'd argue that if the company doesn't put them out, the company is allocating those same resources into something more valuable for the shareholder. However, I'm a little confused by this point you made:

The company is still going to have incentives to beat those targets any way possible.

Are you saying that a company will have executive bonuses based on EPS and not something more tangible? I guess if they have earnings goals, translating them into EPS goals is pretty trivial. For some reason the company having INTERNAL earnings goals seems much more reasonable than spouting off EXTERNAL EPS goals, even though they are basically the same things.

Strange how psychology plays such an important role in how we view companies. I guess an EPS forecast would be better to come from a company rather than the Wise. It's hard being wrong.

Simon
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