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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: Pirah Naman who wrote (47931)	10/15/2001 6:32:57 PM
From: Jurgis Bekepuris	Read Replies (2) of 54805

Pirah, >Yet equity has a component "retained earnings" ... OK. I see. >The actual growth in profits has been below what the >ROE suggests it could be. e.g., KO, SGP WD-40. So you are saying that the management is "massaging" the results to get high ROE. Interesting and partly true - I have to look at how exactly they do it. I already mentioned one way - debt accumulation. Of course, in the long-term the picture emerges anyway. I just looked at KO and its ROE dropped like shoe in the last three years. Also, it's true that one has to consider whether the 10 year ROE can be repeated again in the next ten years. This is where the mechanics ends and the art begins... So I agree with you. Jurgis - who was just wondering if he was missing something else...

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