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Strategies & Market Trends : Raptor's Den II -- Ignore unavailable to you. Want to Upgrade?

To: SOROS who wrote (793)	4/29/2003 4:29:29 AM
From: Berney	Respond to of 3432

Soros, the dude doesn't know what he's talking about! Let's first come to an understanding that I long ago came to appreciate that there is no relationship between FA and price in the short-term. Nonetheless, I follow it as a hobby of sorts. Without factoring in MCD & PG, 24 of the 30 DJIA stocks reported median GAAP EPS of 55 cents vs. 28 cents for the first quarter of 02. I dare say that this is a significant improvement. To my view, the real crime is that companies, even in a GAAP environment are able to release essentially a P&L without the other three statements, particularly the changes in Stockholders' Equity. To demonstrate the point, last year the 30 DJIA companies reported GAAP earnings of $103.7B. However, from my review, they hit stockholders' equity for $40.7B in suddenly discovered, but not currently expensed, pension costs. That means that 39% of last years earnings were totally bogus. My favorites were BA that reported net income of $492M, but stockholders' equity declined by $3.1B, and DD that reported a net loss of $1.1 B, but stockholders's equity declined by $5.4B. Might have something to do with the $3.7B and $2.5B, respectively, that they slammed stockholders' equity for mistaken pension plan assumptions. The bottom line is that the big boyz don't need to do pro forma when GAAP has gapping wholes in it! The fact remains that my TTM PE for the DJIA is 18.8. While I don't consider this a bargain, it certainly isn't in the clouds kind of number. The sad thing is that there is no independent source for these basic numbers that should have some meaning. Respectfully, Berney