Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Raymond Duray who wrote (5476)	1/31/2002 12:42:46 AM
From: Yorikke	Read Replies (1) \| Respond to of 33421

Ray, the word is in many circles that GAAP are in themselves weak. That much of what went on was well within the realm of the 'new accounting' Gaap paradyme. Food for thought there. Not only may things be worse than people ever imagined....they may be worse than most accountants figured. <G> So much for letting a geek profession police itself. Those guys started wearing the right suits and ties and got to calling themselves 'consultants' and that was all she wrote. Their books were cooked.

To: Raymond Duray who wrote (5476)	1/31/2002 2:02:43 AM
From: macavity	Read Replies (1) \| Respond to of 33421

Accounting. I am not sure about the US, but in the UK with all accounts there is a cashflow summary, or something like that. The thing is that the data was always there for most of these companies. People just chose to ignore it. There is the psychological part of the bubble. People believe what they want to. The problem is when the people who are ignoring it also have an agenda with the company they report for. i.e. the consultants and the investment banks. My view, from what little I know is that ENRON/Andersen was essentially criminal. They declared things going one way, and ignored it when it became inconvenient. ENRON is simple: Increasing Profit on Increasing debt and/or reducing free cashflow is false. The bears have been making the point since 1998 about most of these gorilla stocks. There is still the 'dilution' effect of company stock option schemes that has never been taken into account and other on balance sheet manipulations, yet alone the off-balance sheet stuff. We have dodgy accounting standards, criminal management, complicit accountants, and Congress just too willing to pass any law that makes it easier for companies to issue shares/options without them showing on their balance sheets. We still have a long way to go. What we have seen happening to particular companies over the last few days will occur to the market as a whole over the coming years. (Japanese banks - dodgy balance sheets anyone). The Nikkei didn't break 10,000 three years after its top. Buy and holders are dead for the next 5 years if not more. Every position from now is a trade until we get the real bear market low. The market is just waking up to the fact that the "E" in PE ratio is a tissue of lies, and Mr G is allowing it to continue by making people believe that deposits are not worth it. We are watching history, lets make sure we enjoy the view by trading tight. -macavity