Mike,
The real problem I have with my current models and much of the discussion re the current state of affairs, is their nationalistic roots in a world undergoing a globalism paradigm shift. People who have sorted out what this might mean haven't found the motivation to put simple models of how the world really works now, on a silver platter for my consumption.
Yardeni notes some interesting points on Reported vs Core vs NIPA earnings and the impact of one time charges this week, in prudential-yardeni.com
A quick soundbite;
While there are a few companies that are serial abusers of the write-off gimmick, most really do take such charges on a one-time basis. It is interesting to observe that over the past four years, the top 15 contributors to S&P 500 writeoffs accounted for more than 75% of the total. During 2002, the top 15 accounted for 81.1% of the total (so far), with Clear Channel Communications alone responsible for 40.5%. AOL Time Warner accounted for 75.8% of write-offs in 2001, and will be the top contributor for 2002 when they release their 10-K report soon. Of the top 15 write-off contributors over the past four years, six companies appeared more than once (Figure A).
Write-offs soared during the past three years, especially last year, as the excesses of the 1990s hit home. Write-offs are likely to fall off over the next few years now that corporate managers and their accountants are under tremendous scrutiny.
BCA sounds in on the forward picture last week;
U.S. Earnings Expectations Are Holding Up
bcaresearch.com
What if I told you I know of a company with a PE of 8, yield of 5%, and yet is rated a hold by a leading brokerage? (UPM)
Isn't this what TL & EV are supposed to bring about? Is it here today? Maybe not in the overowned major US companies, but perhaps pockets of value in market backwaters and disgust in more generalized investor sentiment are starting to appear. |
