<and I don't even know what you mean by the phrase "accrual accounting shenanigans">
Examples: adjusting amoritization and depreciation schedules to increase EPS, avoiding or manipulating acquisitions and capital projects to prevent diltuion, charges, stock buy back programs (if you want the stock price to go up, increase the value of the company, don't reduce the # of shares outstanding - and if you can't find anything better to do with the money, what does that say about mgmt.), etc. Earnings are very inaccurate measure of value and performance, since they are filtered through so much nonsense.
<Regi you wrote, "I'll look into it from my perspective", however, I'm not exactly sure what you mean by your perspective? >
I am a cash and value guy. If I can by XX value (discounted cash minus expenses) at less than XX-1, then I'll buy it. The dilemma is, many people do not know how to value XX or XX -1 therefore oppurtunites arise (both long and short). If you have any improvements to sugest for my site , let me know.
<As for your statement, "the big money also does not follow sell side analysts recommendations". You will have to define who you are referring to as "the big money". I can tell you first hand, when I was a sell side analyst for EFHutton, I sure believed that "big money" was listening to analysts>
Big money have their own analysts on staff (buy side- since they are buying, not selling) These are the guys who buy in real quatity. Calpers (allegedely), Soros, Buffet, TIAA-CREF, Fidelity, etc. They may consume sell side analysts reports, but some of thier buys side analysts (especially in hedge funds) work off of contignent profit, therefore when they are inaccurate, thier bonus is reduced.
Remember, when you worked for EF Hutton (everybody listened, right), not one retail client paid you a dime as an analyst, you most likely worked at the behest of institutional clients to move thier stock after an underwriting, or to move the firms own inventory thourgh supporting the sales force. |
