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Pastimes : All Clowns Must Be Destroyed -- Ignore unavailable to you. Want to Upgrade?

To: Joan Osland Graffius who wrote (23418)	4/5/2000 10:24:00 PM
From: pater tenebrarum	Respond to of 42523

Joan, i believe that today's "analysts" are generally not doing much by way of analysis. they get spoonfed by managements and have to always keep an eye on their firms investment banking arms. accordingly they tend to be too optimistic in their estimates. i find it btw. astounding that corporate America has managed to grow earnings above GDP growth rates for such a long time. the answer to that riddle can be found in modern day accounting practices imo, which have become a great vehicle for cloaking reality. stock buybacks are another factor, as everybody focuses on eps. i recently read a report on IBM that looked at revenues and earnings growth in recent years and concluded that it was anemic. however, eps increased due to the buybacks. at the same time, the balance sheet worsened considerably, with debt exploding from $20 bn. to $80bn. within three years, as the buybacks are debt financed. this practice will come back to bite corporations and investors alike.