Friday File: Sales for Profit and Loss, plus a couple add-on buys post-earnings

Checking in on earnings and Real Money Portfolio updates -- including ANET, ATVI, OPI, MKL, SAND, SHOP, GOOG, AAPL and more...

By Travis Johnson, Stock Gumshoe, November 1, 2019


Happy Friday! I’ve got another reading assignment for you today… the researcher behind the Dunning-Kruger effect posted an interesting article called “We Are All Confident Idiots” a couple years ago that just came to my attention (I think someone posted it on Twitter, but forgot to jot down the original source). Here’s a little excerpt, but I recommend everyone take a few minutes and read the whole thing — the more we can understand about the misinformation that fills our brains, the better our chances of acting rationally.

“Because it’s so easy to judge the idiocy of others, it may be sorely tempting to think this doesn’t apply to you. But the problem of unrecognized ignorance is one that visits us all. And over the years, I’ve become convinced of one key, overarching fact about the ignorant mind. One should not think of it as uninformed. Rather, one should think of it as misinformed.

“An ignorant mind is precisely not a spotless, empty vessel, but one that’s filled with the clutter of irrelevant or misleading life experiences, theories, facts, intuitions, strategies, algorithms, heuristics, metaphors, and hunches that regrettably have the look and feel of useful and accurate knowledge. This clutter is an unfortunate by-product of one of our greatest strengths as a species. We are unbridled pattern recognizers and profligate theorizers. Often, our theories are good enough to get us through the day, or at least to an age when we can procreate. But our genius for creative storytelling, combined with our inability to detect our own ignorance, can sometimes lead to situations that are embarrassing, unfortunate, or downright dangerous—especially in a technologically advanced, complex democratic society that occasionally invests mistaken popular beliefs with immense destructive power (See: crisis, financial; war, Iraq). As the humorist Josh Billings once put it, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” (Ironically, one thing many people “know” about this quote is that it was first uttered by Mark Twain or Will Rogers—which just ain’t so.)”

What’s going on with the Real Money Portfolio this week? Well, we’ll start off with the bad news…

Arista Networks (ANET) is, it seems to me, having their perennial “big customer” problem. The biggest part of their business is sales of networking equipment to “Cloud Titans”, and in that group they have two ...

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