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Politics : Ask Michael Burke
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To: Mike M2 who wrote (64229)7/9/1999 10:29:00 AM
From: Freedom Fighter  Read Replies (2) of 132070
 
Mike,

>>I have often heard that Japanese accounting tends to understate earnings but I can't quantify its impact. <<

I have one small insight. Japanese companies tend to have large cross holdings.

It's sort of like Berkshire Hathaway. BRK has an over 10 billion dollar position in Coke, but only the small dividend KO pays flows through to BRK's income statement. So BRK's PE is meaningless.

I suspect that Japanese companies with large cross holdings are much less expensive than the PEs suggest for a similar reason but I am not familiar with Japanese accounting.

Wayne
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