Ok...This is strange. If you try to access the link that Mark provided, you need to be a subscriber. But, if you run a Google search on "Why company results may vary" and click the WSJ link that comes up in the first position, you get the full article - at the same URL!
Ira Smilovitz
On Fri, Apr 24, 2015 at 5:32 PM, Mark Eckman <mark2459@gmail.com> wrote:
True, but copyright says I can't pass the article. But it is a posting dated 4/24, so if someone has today's WSJ, see if you can find it.
Mark
On Fri, Apr 24, 2015 at 12:56 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:
Thanks for passing this on Mark,
It looks like a good article, but you have to have a WSJ subscription to view it. Not sure everyone will have that.
Laurie Frederiksen Invest with your friends! www.bivio.com
Ok...This is strange. If you try to access the link that Mark provided, you need to be a subscriber. But, if you run a Google search on "Why company results may vary" and click the WSJ link that comes up in the first position, you get the full article - at the same URL!
Ira Smilovitz
On Fri, Apr 24, 2015 at 5:32 PM, Mark Eckman <mark2459@gmail.com> wrote:
True, but copyright says I can't pass the article. But it is a posting dated 4/24, so if someone has today's WSJ, see if you can find it.
Mark
On Fri, Apr 24, 2015 at 12:56 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:
Thanks for passing this on Mark,
It looks like a good article, but you have to have a WSJ subscription to view it. Not sure everyone will have that.
Laurie Frederiksen Invest with your friends! www.bivio.com
Ok...This is strange. If you try to access the link that Mark provided, you need to be a subscriber. But, if you run a Google search on "Why company results may vary" and click the WSJ link that comes up in the first position, you get the full article - at the same URL!
Ira Smilovitz
On Fri, Apr 24, 2015 at 5:32 PM, Mark Eckman <mark2459@gmail.com> wrote:
True, but copyright says I can't pass the article. But it is a posting dated 4/24, so if someone has today's WSJ, see if you can find it.
Mark
On Fri, Apr 24, 2015 at 12:56 PM, Laurie Frederiksen <laurie@bivio.biz> wrote:
Thanks for passing this on Mark,
It looks like a good article, but you have to have a WSJ subscription to view it. Not sure everyone will have that.
Laurie Frederiksen Invest with your friends! www.bivio.com
Interesting find Ira. We just did some further testing of the Googling technique. It appears they may cut you off after a certain number of free articles.
Bob, the link you sent didn't work for me.
Either way, it is an interesting article. Personally I prefer to work with GAAP numbers since there are rules for how those are reported. Then I can add my own thoughts about whether or not I want to "massage" them through elimination of "one time" charges.
Note that the "one time" charges that the analysts are choosing to ignore are often not what can be officially considered by the accounting rules to be "Extraordinary". In fact, there are so few items that can officially be placed in that category that FASB is considering eliminating it entirely.
This means that the "one time" items the analysts are ignoring are something that provide you with information on the financial status of the company. If you are going to remove them from reported earnings to make projections, it is really important to have a good understanding of what the information is telling you before you do.
Laurie Frederiksen Invest with your friends! www.bivio.com
Laurie, This one-time charge issue reminds me of two companies. Back in the 1990's, AIG constantly had "one-time' charges. Thus, its EPS looked good. (The data from S&P and from Morningstar were quite different, as were the Section 1 graphs.) In 2013, Starbucks lost a lawsuit over "tipping" and took the entire cost against earnings in that year. EPS was scary, unless you knew the story behind such a large drop. I'm sure non-GAAP numbers would have looked good; GAAP was horrid. But, as you say Laurie, I want to see the correct numbers and I'll remove any I believe don't reflect a company's business. (I did this for SBUX, which gave me what I perceived was a good sense of how well the company was being run.)
Roy "We make a living by what we get, we make a life by what we give." (Ronald Reagan, 8/8/1992)
On Apr 25, 2015, at 9:26 AM, Laurie Frederiksen <laurie@bivio.biz> wrote:
Interesting find Ira. We just did some further testing of the Googling technique. It appears they may cut you off after a certain number of free articles.
Bob, the link you sent didn't work for me.
Either way, it is an interesting article. Personally I prefer to work with GAAP numbers since there are rules for how those are reported. Then I can add my own thoughts about whether or not I want to "massage" them through elimination of "one time" charges.
Note that the "one time" charges that the analysts are choosing to ignore are often not what can be officially considered by the accounting rules to be "Extraordinary". In fact, there are so few items that can officially be placed in that category that FASB is considering eliminating it entirely.
This means that the "one time" items the analysts are ignoring are something that provide you with information on the financial status of the company. If you are going to remove them from reported earnings to make projections, it is really important to have a good understanding of what the information is telling you before you do.
Laurie Frederiksen Invest with your friends! www.bivio.com
Those are good examples Roy. Any sort of "one time" charges tell you something about how a company is being managed so it is important to understand what they are for and whether they are truly "one time" or the way the current management does business.
For example, frequent "One time" charges can flag a company that is overpaying for acquisitions to goose top line growth, one that is underfunding pensions to goose bottom line growth, or one that is running their business on the ragged edge of the law.
They should make you question whether the past history you are using to make projections about the future is as good as it really looks.
In many cases, the "one-time" charges are really showing you that all of the historical earnings numbers you are making projections with should have been lower than they were. That should temper your future projections.
Laurie Frederiksen Invest with your friends! www.bivio.com
On Sat, Apr 25, 2015 at 6:06 PM, Roy Chastain wrote:
Laurie, This one-time charge issue reminds me of two companies. Back in the 1990's, AIG constantly had "one-time' charges. Thus, its EPS looked good. (The data from S&P and from Morningstar were quite different, as were the Section 1 graphs.) In 2013, Starbucks lost a lawsuit over "tipping" and took the entire cost against earnings in that year. EPS was scary, unless you knew the story behind such a large drop. I'm sure non-GAAP numbers would have looked good; GAAP was horrid. But, as you say Laurie, I want to see the correct numbers and I'll remove any I believe don't reflect a company's business. (I did this for SBUX, which gave me what I perceived was a good sense of how well the company was being run.)
Roy "We make a living by what we get, we make a life by what we give." (Ronald Reagan, 8/8/1992)
On Apr 25, 2015, at 9:26 AM, Laurie Frederiksen <laurie@bivio.biz> wrote: