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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 (368)	6/5/1998 7:23:00 PM
From: Reginald Middleton	Read Replies (1) \| Respond to of 1722

I have always had serious probelms with the accuracy of earnings as a proxy for shareholder value. I compared the correlation of about 4,400 companies' earnings to market value over the last ten years and found it to be very low. Depending on the industry, various cash flow measures track market value MUCH more cloesly. Look here rcmfinancial.com or here rcmfinancial.com for an example.

To: Freedom Fighter who wrote (368)	6/7/1998 4:20:00 PM
From: porcupine --''''>	Read Replies (3) \| Respond to of 1722

This week in Barron's: > From: WCrimi@aol.com > Date: Sun, 7 Jun 1998 14:23:54 EDT > To: gadr@nyct.net > Subject: Barron's Articles > Two excellent articles in Barrons this week. > One on accounting gimmicks at > Sunbeam ... I agree. The prudent investor must not only analyze the numbers, he or she must also make (in my opinion partially subjective) judgments about whether or not to believe management. > ....and another about the U.S market called "Deserting the > Bulls". As you know, I am agnostic on most historically-based statistical correlations. I think the point you've made recently (was it on your Web site?) about the price of a company tending toward the replacement cost of capital sounds more intuitively plausible, and is food for sober reflection. Reynolds Russell web.idirect.com "There are no sure and easy paths to riches in Wall Street or anywhere else." (Benjamin Graham)