Reuters has picked up an analyst's report panning two stocks in the Low P/E Bin. The report forecast that the dividend for Eaton Corp. and Caterpillar are at risk of being cut in the second half of this year. Eaton is a company held by Bershire Hathaway, I add for information's sake.
There's just one glitch in that report: Caterpillar has already declared its dividend for 3Q '09, and the dividend has been held steady for that quarter.
It's not that big a deal, and the analyst responsible can claim that the second half also encompasses the fourth quarter. (Or, said analyst can claim to have been misinterpreted by the Reuters reporter.) If it were a genuine mistake, I have an inkling of how it got made. Reports made under pressure require a lot of focus, the kind of focus that leads to a kind of cognitive tunnel vision. It seems to be a high-pressure workaholic's variant of focusing illusion...which brings up the question of whether or not the high-pressure workaholic ethic aggravates one's cognitive biases.
Anyways, I have to acknowledge that I'm in no position to cast stones. In the rudimentary report I did on Harvest yesterday, I've already made two substantive corrections.
Buffett's annual letter
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