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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host

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To: kahunabear who wrote (5251)5/30/1998 4:25:00 AM
From: Skeeter Bug  Read Replies (2) of 42834
 
whip, another consideration related to valuations is the reality of reported eps.

two issues impact them a lot. the options technique of transferring payroll costs directly to shareholders w/o passing the income statement is one issue. this "game" works as long as we are in a bull market and employees accept options in lieu of salary. bear market = "game over" and salaries will sky rocket or key personnel walk, imho.

the fact that everyone seems to have recurring non-recurring charges is a second issue.

some have postulated that a few companies are writing down old inventory to $0 and then selling it and counting the whole price as "earnings." dimd is one supposed perp of this "game."

eps may be over stated by 20-30%. that 28 pe looks a little low to me.

food for thought.

skeets out...
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