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

To: porcupine --''''> who wrote (194)	4/19/1998 3:08:00 AM
From: porcupine --''''>	Read Replies (1) \| Respond to of 1722

<< In almost no instance is either the Book Value or ROE used as an input to the models. >> Aren't Buffett's cash flow projections derived from his expectations for ROE --???>

To: porcupine --''''> who wrote (194)	4/19/1998 3:14:00 AM
From: porcupine --''''>	Read Replies (1) \| Respond to of 1722

<< No one that I am aware of has stated that PEs are inflated due to ROE measurements. >> For clarification, I'm saying that ROE is inflated both by an overstatement of earnings and by an understatement of equity.

To: porcupine --''''> who wrote (194)	4/19/1998 3:19:00 AM
From: porcupine --''''>	Read Replies (1) \| Respond to of 1722

<< I use a lot of macro-economic statistics, stated ROE, a measure of ROE that uses only recent retained earnings and the growth they have produced, distributions of income between workers and business, and several other indicators. None is truly accurate due to the many complexities, but they serve my purpose. >> That's how I feel about Value Line.

To: porcupine --''''> who wrote (194)	4/19/1998 3:35:00 AM
From: porcupine --''''>	Read Replies (1) \| Respond to of 1722

<< Keep in mind they have already been charged to earnings and VL makes no mention of any of this [i.e., that future cash payouts for workers' medical benefits will not be reflected on the income statement if and when they are actually made]. >> They are included in the VL earnings and cash flow numbers at the time the workers' rights to these expected future payouts first accrue. The failure to do so previously was one of the bases for the claim that the current figures are inflated.