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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: Boca_PETE who wrote (14725)	7/12/2001 5:39:00 PM
From: Skeeter Bug	Respond to of 42834

pete, what is advertised to the public and what is submitted to the sec are often, very often, two entirely different things. "pro forma" is the concept du jour among all the creative accountants. it means hypothetical. amazon is promising a hypothetical profit in q4. the sec gets the real documents. oh, and many articles tout amzn's promised "profits." my father went through 6 years of post graduate school. a very well educated guy. and very busy. he told me amzn promised to make a profit in q4. i had to explain to him that they would not report a profit. they would lose around $100 million. i had to explain aall the expenses the "pro forma" excluded. this was news to him. he's too busy to find waldo and amzn's manipulation worked. it worked for go2net, too. my dad told me they turned a profit their last q before being sold after i commented how insane it was for folks to build nonviable businesses, make $10s of millions personally and NEVER turn a profit. again, it was pro forma. they lost a lot of dough their last q. of course, my dad has a hard time believing the articles he reads are flat out wrong. they SEEM so credible. the bottom line is that bad news is obfuscated. legal? in many cases, yes. ethical? i don't believe so. these companies manipulate the numbers to increase the cost of finding the truth. it can still be found. it is there. right next to waldo. that is my point. why not be up front instead of real slimy about it. they KNOW 99% of folks don't due the research so they consciously attempt to fool them. it works. i am not positive about about msft's shenanigans. i know intel and gtw were leaders of the "add in the investment gains to make it appear like operations were better than they were at first glance" crowd. when the bad news hits there is a neat line item and it is highlighted in the headline. make it difficult to see the gains (and make ops look better than they otherwise would) and make it easy to exclude the one time loss to make ops look better than they would otherwise. i don't really blame the companies for wanting to manipulate the herd. i blame the herd for being so dumb and rewarding this nonsense. the problem is that everyone sees this the same way - the way of self interest above up front reporting. NOBODY adds line items for gains and excludes them for losses. NOBODY. single vision there, huh? ;-) also, nobody trumpets gains in headlines and sticks losses in small print on page 37 of their sec filings. pretty consistent there, too. ;-) don't tell me that folks aren't directly fooled by the games these accountants play. that is like the cigarette ceos saying smoking isn't addictive after they added chemicals to make them more addictive!