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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era -- Ignore unavailable to you. Want to Upgrade?

To: Freedom Fighter who wrote (90)	3/18/1998 1:36:00 PM
From: Bob Martin	Read Replies (1) \| Respond to of 1722

Re: Abby Cohen's earnings estimates appearing higher then S&P's My guess is she is looking at earnings exclusive of non-recurring gains and losses. If you ever listen to Bob Brinker on the radio, he does the same thing. I do, too, when I evaluate a company. The danger here is that some companies have far too many "non-recurring" charges and gains, making them pretty much "recurring". I have no idea what portion of the S&P 500 are this type of "problem" company. If it's not too many, then this is a perfectly valid way of looking at things. You want to know how much money a company is making based on ongoing operations. If a one-time charge occurs, that may give you an artificially low view of the company's ability to generate cash. Note I have never tried to apply this to an index or group of companies. If I come across a company that has too many one-time charges, I move on and ignore it as an investment candidate. Bob