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Strategies & Market Trends : BFT: Will the tulip craze ever break down?
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To: robert elmasian who wrote (168)3/26/1998 6:37:00 AM
From: Pancho Villa  Read Replies (1) of 650
 
>The bull market has put a premium on deception
because it pays so well. Listen to J. Terry
Strange, head of auditing at KPMG Peat
Marwick, the fourth-largest accounting firm:
"There's probably more pressure to achieve
results than at any time that I've seen." Not only
do bonuses and stock options depend upon
earnings growth, so does a company's ability to
do mergers, raise money and survive as an
independent entity.

Chief executive compensation is usually tied to
corporate results-operating income, net
earnings, stock prices. A few pennies more in
per-share earnings can translate into millions in
option gains and bonuses.

Even for professional investors, it's not easy to
see through the deceptions: Look at Oxford
Health Plans. In theory, stock analysts should be
on the alert for deception, but as FORBES has
pointed out (Dec. 15, 1997), too many analysts
are essentially on management's side. <

From the fortune piece. Sounds familiar! Also be aware BFITs management is a sophisticated team of accountants. Still, they cannot create cash unless they steal it! Manipulation of financial statements (uncovered in these thread) resulted in the so called beating of the estimates.

Pancho
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