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Strategies & Market Trends : The Stock Market Bubble -- Ignore unavailable to you. Want to Upgrade?


To: Giordano Bruno who wrote (3290)7/18/2000 10:04:18 PM
From: pater tenebrarum  Read Replies (2) | Respond to of 3339
 
<<For investors, the question becomes whether the gains are a legitimate part of earnings or just a way to pump up the reported number. >>

you have one guess...-g-

this is exactly what happened during the Japanese bubble as well...all the companies went and started to speculate in the stock market. in fact, this is a recurring phenomenon in all market manias. eventually it becomes a huge liability....



To: Giordano Bruno who wrote (3290)7/19/2000 7:52:38 PM
From: Roger A. Babb  Read Replies (1) | Respond to of 3339
 
jjsirius, re New Era Earnings

I think the new rule is that you include investment gains as "earnings" but count any investment losses as "extraordinary events". The accounting will get even more creative as companies try to maintain their high earnings growth rates in a slowing economy.