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Pastimes : Bad investing information/advice on the net contest

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To: Edwarda who wrote (135)	11/14/1999 3:27:00 PM
From: Chuzzlewit	Read Replies (1) of 214

Edwarda, I believe that sell-side analysts provide a fund of bad investing information. Unfortunately, the investing public seems to be blithely unaware of just how bad the information can be. The link you provided dramatically shows just how potent cash flow analysis is in uncovering problems. In fact, OXHP's demise (It was once a $90 stock) could have been predicted using the same warning signs discussed in the article. But how many sell-side analysts talk about such obvious disparities as declining operating cash flow when earnings are increasing? How many discuss the gap between taxes paid and "provision for income taxes"? And how many talk about off the income statement expenses like employee stock options? To be sure, some talk about the "quality of earnings", or note increases in DSOs, but that's really double talk because they routinely side-step the major issue: GAAP earnings are really smoke and mirrors for many companies. Instead, they focus on projections of GAAP earnings and sales growth. I am still scratching my head in wonderment over analysts' recommendations of AMZN. TTFN, CTC

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