Paul -
I was referring to "accretive" in the literal meaning of the word, as in "it will add to" earnings. It is highly unlikely that it would "add to" earnings per share, assuming a pooling of interests type deal.
I am not aware of whether from an investment industry perspective the lingo "accretive to earnings" really means "accretive to earnings per share", but it's not a big deal. In general, I prefer to side with Webster if I must choose between industry slang and proper usage as determined by general use over the course of many centuries.
Regarding the "gorilla":
Thanks for pointing out that it only applies to technology - that makes a difference. Even though I think it was written more as a way to sell books, than as a way to add to the body of investment knowledge, I am sure there are some nuggets to be gleaned. I often read books and articles that I don't entirely accept as completely valid information, but tend to get some value - if nothing else it lubricates the mind to compare the ideas against one's own view of the world.
Like many things in our "marketing" dominated society, though, I am afraid many of these types of books start with the marketing analysis driving the content of the book rather than good investment ideas driving the content. The success of this book probably has more to do with a compelling title and the public's current apetite for finance information, particulary related to the dramatic technology sector, where fortunes continue to be made.
Simple ideas like Graham's or Lynch's:
good companies that are earning a good return
have pricing power and not subject to impending commoditization
good industry growth prospects; no. 1 or 2 in market
management with solid track record
don't overpay for projected discounted cash flow
....are already out there, so the marketeers need to constantly present new ideas about how to get rich. There's always a market for schemes to create wealth.
In my opinion, it's difficult enough to do the work required for the fundamentals. Adding "Gorilla" tactics to my investment approach would only take time away from the fundamentals and would require a testing period. I think the proven and time tested approach of fundamental analysis of each individual stock is the way to go (at least as the beginning point).
I am becoming more interested in supplementing the fundamental approach with additional analysis: technical or momentum analysis, potential event-based demand drivers, inefficiencies caused by market manipulation, etc., but don't yet have a structured understanding or approach.
Cheers. Rick. |
