E-motions: Vol. No. 1, Issue No. 25 Brought to you by California News Tech (OTC BB: CNTE)

By: Tai Nicolopoulos E-Motions Writer 05/05/2006

Employment on the Public Mind: Investors May Over-Estimate Job Market

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1. Emotions in Focus: Political Hype and the Availability Heuristic

    Recently, the American job market has been put into focus in the public eye with the Department of Labor’s recent report, highlighting rising employment across the country. The report, as well as President George W. Bush magnifying the results in order to capitalize on this piece of economic good news, kept decreasing joblessness rates in the news. Despite the fact that other numbers suggested that 11,000 more Americans had actually claimed joblessness during the end of April, the public perception of an improving job market remained. In fact, investors may have dramatically over estimated how many jobseekers were finding employment and irrationally driven up stock prices in the job placement and staffing sector.

    These faulty estimates are what psychologists Amos Tversky and Nobel Prize winner Daniel Kahneman called the availability heuristic. The availability heuristic is a rule of thumb, or heuristic, which occurs when people estimate the probability of an outcome based on how easy that outcome is to imagine. Consequently, outcomes that have been emphasized, described vividly and repeated frequently in the media, such as President Bush’s employment story, will be perceived as being more likely than those that are harder to picture or are difficult to understand. For instance, the reality of conflicting employment numbers showing a job market that is closer to neutral, will be perceived as less likely. The job market, and its supposed improvement, have been highly available in the public mind recently. Consequently, investors may have over-estimated the profitability of companies involved, directly, or indirectly, with the much-touted American job market.

2. The Big Movers and Why

    Are you missing out on potential profits from Heads UpTM recommendations? Last week, MediaSentimentTM subscribers using Heads UpTM for Thumbs Up / Thumbs Down recommendations for publicly traded companies were able to take advantage of these Big Movers as they released earnings:

Big Movers in the Spot light:     Last week two companies particularly felt the effects of the public’s perceptions about the current job market. The first company, Manpower, Inc, (NYSE: MAN), which together with its subsidiaries, operates in the employment services industry worldwide, was up 11.81% on Tuesday, April 18th, on a Heads Up™ Thumbs Up recommendation after releasing earnings. The second company, Robert Half International, Inc. (NYSE: RHI), which provides specialized staffing and risk consulting services worldwide, was up 5.08% on Friday, April 21st, on a Heads Up™ Thumbs Up recommendation after releasing earnings. Analyst buzz about the job market, based on the Department of Labor’s recent report, had escalated throughout the week, making both companies popular picks.

Other Big Movers: Friday, April 21, 2006

ZHNE down -12.22%
Zhone Technologies, Inc. and its subsidiaries engage in the design, development, and marketing of communications network equipment for telephone companies and cable operators worldwide.

RHI up 5.08%
Robert Half International, Inc. provides specialized staffing and risk consulting services worldwide. The company operates in three segments: Temporary and Consultant Staffing, Permanent Placement Staffing, and Risk Consulting and Internal Audit Services..

BTUI up 9.10%
BTU International, Inc. engages in the design, manufacture, sale, and servicing of thermal processing systems that are used primarily in the electronics and energy generation industries.

Thursday, April 20, 2006

KVHI up 5.17%
KVH Industries, Inc. engages in the design, development, manufacture, and marketing of mobile communications products for the land and marine markets; and navigation, guidance, and stabilization products for defense and commercial markets in the United States.

HNI down -9.55%
HNI Corporation engages in the design, manufacture, and marketing of a range of office furniture and hearth products.

SPWR down -9.90%
SunPower Corporation engages in the design, manufacture, and sale of solar electric power products.

BGG down -12.83%
Briggs & Stratton Corporation produces air cooled gasoline engines and engine powered outdoor equipment worldwide.

HZO up 10.46%
Marinemax, Inc. engages in the retail sale, brokerage, and servicing of new and used boats, motors, trailers, marine parts, and accessories in the United States.

Wednesday, April 19, 2006

RDN up 7.22%
Radian Group, Inc., through its subsidiaries and affiliates, provides credit protection products and financial services to mortgage lenders and other financial institutions. It operates in three segments: Mortgage Insurance, Financial Guaranty Insurance, and Financial Services.

EBAY down -9.07%
eBay, Inc., together with its subsidiaries, provides online marketplaces for the sale of goods and services, online payment services, and online communication offerings to a diverse community of individuals and businesses in the United States and internationally.

SRDX up 6.98%
SurModics, Inc. provides surface modification and drug delivery technologies for the healthcare industry. It operates in three segments: the Drug Delivery, the Hydrophilic and Other, and the Diagnostics.

JCI up 9.84%
Johnson Controls, Inc. provides installed building control systems and technical and facility management services for the nonresidential buildings market worldwide. It operates through three segments: Building Efficiency, Interior Experience, and Power Solutions.

UTX up 7.10%
United Technologies Corporation (UTC) provides technology products and services to the building systems and aerospace industries worldwide.

WWW up 16.74%
Wolverine World Wide, Inc. engages in the design, manufacture, and marketing of a line of casual shoes, rugged outdoor and work footwear, and constructed slippers and moccasins primarily in the United States.

Tuesday, April 18, 2006

BCR up 8.87%
C. R. Bard, Inc. (Bard) engages in the design, manufacture, packaging, distribution, and sale of medical, surgical, diagnostic, and patient care devices worldwide.

BKUNA up 8.15%
BankUnited Financial Corporation operates as the holding company for BankUnited FSB that provides consumer and commercial banking products and services to consumers and businesses in Florida.

PH up 6.60%
Parker-Hannifin Corporation manufactures fluid power systems, electromechanical controls, and related components. It operates through four segments: Industrial, Aerospace, Climate and Industrial Controls, and Others.

BTU up 11.66%
Peabody Energy Corporation, through its subsidiaries, operates as a private sector coal company worldwide.

MAN up 11.81%
Manpower, Inc., together with its subsidiaries, operates in the employment services industry worldwide.

Monday, April 17, 2006

CHNL down -8.03%
Channell Commercial Corporation engages in the design and manufacture of telecommunications equipment to the broadband and telephone network providers worldwide.

    All figures reflect all MediaSentiment Heads UpTM recommendations between Monday, March 27, 2006 and Friday, March 31, 2006, rating companies on the day of their quarterly earnings releases correlated with their stock highs and lows for the subsequent day.

3. How to Use the News

    Investors may interested in either investing further in the job placement industry or exploring other industries highlighted by government reports or policy in the future. In either case, it is important to consider the economic reality behind the political news media hype. Do the numbers actually represent more business for related industries? Even if this is the case, how long will these changes actually support major growth in related industries? For instance, how long can a supposed increase in employment actually improve business for job placement services? Furthermore, not all companies in a highlighted sector are the same. For longer term, and even short term, holds it is important to examine a company’s fundamentals and to research public sentiment about it over time. Use tools like MediaSentiment Heads Up’s historical function and MediaSentiment Trend™ to view how investors and the media have viewed a company in the past and to make a determination about how a company will continue to fare in the future.

4. Links you can use

US Jobless Claims rise 11,000 Last Week
Job Market Report Shows Favorable Numbers

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