Mike, I don't think that corporate sleaze in the accounting numbers is peculiar to this manic bull market, but I think it is much more pervasive this time. Also, there is no sense of outrage. Barron's had a couple of pieces on Disney that showed, and I think very convincingly, that their eps are more of a fantasy than their cartoons. I am not saying that everyone should accept the Barron's criticism, but this stuff is only being debated in places like SI, and not much here. If you don't actually break the law, nobody seems to care that you are inflating reported eps. That bothers me. It is an attitude that as long as everyone else trades the stocks as though the reported eps are true statements of fact, then it doesn't matter if they are phony or not. I am waiting for somebody to open up one of these salad oil silos. <G> For those too young to remember, that was a reference to my fellow Texan and LBJ pal, Billy Sol Estes, who sold a lot of salad oil that didn't exist. People usually check on the contents by looking in a glass something like a periscope. So good ol' Billy Sol simply filled up the glass tubes and the rest of the silo was empty. That is the way we are looking at corporate eps now, through a glass tube that has been jimmied.
MB |
