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

To: sea_biscuit who wrote (1853)	10/26/1997 7:15:00 AM
From: Boca_PETE	Respond to of 42834

Dipy: During 1995, many companies were required to book special item writeoffs for impaired long-lived assets under a new accounting rule know as SFAS 121. As special items, these writeoffs escaped normal operating earnings reported for 1995. Without these items carried as depreciable assets starting in 1996, go-forward depreciation expense was lower and operating earnings go-forward was higher. Depreciation Expense and other noncash changes plus net income equals Cash Flow. When Her Ladyship states her Cash Flow Indicator was not accurate, I believe she was unaware of the implications of this accounting change on her Cash Flow Indicator and became alarmed by the drop in depreciation expense reported during the first half of 1996 which she failed to realize was offset by higher operating earnings that resulted from that lower depreciation expense (that would have a zero impact on cash flows). As a estute analyst, I would think she would have known about this change and its implications, however she is not a CPA. Certainly those who followed her advice lost a lot of upside as a result. But, at least she had the character to admit a mistake, correct it, and move on. She also must have something on the ball to have held such a prestigious position in that Wall Street firm she worked for. That's my only point. P

To: sea_biscuit who wrote (1853)	10/28/1997 6:05:00 PM
From: Boca_PETE	Read Replies (3) \| Respond to of 42834

Dipy: It looks like THE GARZ's gauges may be working again based on her NBR prediction last Friday as follows" "KANGAS: Well, you always have a fair market value, in terms of the Dow Industrial Average. Where does that stand, now? GARZARELLI: Well, I think we're in a trading range where the up side would be about 8500, 8600. Down side, 7,000 on the Dow. That is at current interest rates. Our models, however, suggest that the long-term bond yield that's currently about 6.30, should be 5.8 percent" She appears to have predicted the 7000 low for this correction. Now let's see if she gets the high which corresponds closely with BB's latest upside target. What do you think ? P