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Politics : Ask Michael Burke

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To: Knighty Tin who wrote (66842)8/27/1999 11:09:00 AM
From: Freedom Fighter  Read Replies (2) of 132070
 
Mike,

I have a simple suggestion for AG.com to solve his confusion about what earnings really are and how to measure them in a world of high R&D and information.

How about not looking at them?

No matter what earnings really are and what accounting standards you use the net cash that a business generates after its investments is real and measurable.

If the investment rate is high as a percentage of earnings the rate of growth of that free cash should also be high. If it is low then the growth rate will be low but the amount be higher.

So it possible to have some measure stock prices in relation to each other and the past without looking at the reported earnings.

Wayne
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