Re: [CANSLIM] Worley's W W - Japan and TYC

From: "Patrick Wahl" <pjwahl@attbi.com>
Subject: Re: [CANSLIM] Worley's W W - Japan and TYC
Date: Sun, 10 Feb 2002 12:18:40 -0700

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I think if you have the bad luck to get into Enron, you have to put some faith in what
the chart might be telling you, if it is disagreeing significantly from the fundamentals
and the analysts. I'd comment on the chart, but I think its gone. Someone always
knows something early in those situations, and I think I've heard the insiders were
selling last summer.

This is one case where I have to cut the analysts some slack, the problems sound
like they were pretty well buried. I also read an article this week that on one visit
analysts paid to Enron, some Enron employees were taken to an empty computer
room and told to look busy to make the place look busier than it was. I guess when
a company is going to those lengths to hide things, there isn't a lot the individual
investor can do.

On 10 Feb 2002 at 7:11, Tom Worley wrote:

> As far as avoiding a disaster like Enron, I don't have good answers. Since I usually buy small immature companies, I think I am at less risk, most are just not sophisticated enough for such a scam. And since all the professionals (analysts, fund managers, banks, institutional investors) seem to
have missed the issues on Enron, I don't feel I lose much in buying stocks without lots of analysts and funds behind it. One thing I had already been paying more attention to is cash flow compared to earnings. If there is a huge difference, especially if ROE is low, then I do further due
diligence. But if a company can phony up earnings, I guess they can phony up cash flow as well. And I think the new accounting standards for reporting earnings will make it even easier to fudge the numbers.

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