Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Jan Crawley who wrote (18496)	9/26/1998 2:40:00 PM
From: Glenn D. Rudolph	Respond to of 164684

Another snippet from Businessweek: The good times have also served to take investors' eyes off the ball. During the eight-year-long bull market, many took a ''don't ask, don't tell'' approach. As long as earnings were up, why look too closely at how management pulled it off? But those days are over. ''There's a phenomenon in up markets that most analysts don't pay too much attention to accounting,'' says Gerald I. White of New York investment firm Grace & White Inc. ''In bad markets, these problems come home to roost, and that's when people pay attention.'' Those are exactly the sorts of issues that the stock market is starting to sort out. One result is that investors may put companies under more pressure to show that they have a solid foundation under their earnings. But the SEC seems more concerned there will be a rush in the other direction, toward more accounting smoke and mirrors. And some investment pros are arguing for a return to more fundamentals-driven stock picking. White argues that the current trend confirms his view that searching out companies with conservative accounting is best. Other investors are turning to other measures of corporate performance, such as Economic Value Added--net operating profit after taxes in excess of the cost of capital. That tool is used at Goldman Sachs and Credit Suisse First Boston. The argument for those numbers is that they are harder to manipulate. But they are still not foolproof. Any company intent on jazzing up the numbers is probably going to figure out a way to obscure its true performance. ''Increasingly, this culture is one of getting away with what you can,'' says investor Gary L. Pilgrim, founder of Pilgrim Baxter & Associates. ''What we need is more integrity''--integrity in managers and integrity in their numbers. Glenn