Rocky, it's amazing, isn't it? Now that a greater percentage of the American population owns stocks than at any other point in history, the very basics, like stock splits, share price, market cap, and earnings per share are utterly lost on the average investor.
In my opinion, this influx of ignorance into the once elitist investment community has been a large factor in the development of the equity mania.
To an accountant, who wouldn't think of investing in a company without poring through a balance sheet, such subtleties as whether investment gains and losses appear as one-time items or are added into net income are non-issues. But to the average American investor, who is never quite sure why figures are sometimes preceded with a $ but at other times are followed by a %, a little accounting subterfuge or earnings sleight of hand can make an earnings report utterly opaque.
Remember, the average American cannot add 1/3 + 1/4, and doesn't have any real idea how big a centimeter is.
Dave |
