Adam, RE: The actions of the SEC, DOJ, Congress, the media, and the big financials all are directing the public to distrust non-GAAP, pro forma statements.
Every group you mentioned has a very short time horizon, certainly shorter than any individual should have when it comes to equity investments.
If the markets misprice something because of the above issues you discuss, then it would be much more profitable to take the opposite side of their stance in the markets.
Three years ago, none of those entities you are describing cared one bit about GAAP. They tacitly endorsed the proliferation of increasingly absurd pro forma earnings statements. According to you logic, because they all were going in that direction, everyone else should, too.
In the meantime, people who remembered that there is and was value to GAAP were saved a lot of time.
Similarly, today, just because all of those entities all of a sudden are endorsing GAAP at the expense of everything else (including, sometimes, common sense) doesn't mean we should blindly follow then now any more than we should have then.
Some of us know how to interpret financial statements, but as I've mentioned before, 99% of the public does not.
People who do not know how to interpret financial statements should be investing in mutual funds, not individual stocks. |
