RE: [CANSLIM] Validity of Earnings Reports

From: "Mona Guarino" <webmaster@design21.com>
Subject: RE: [CANSLIM] Validity of Earnings Reports
Date: Sun, 14 Apr 2002 21:16:43 -0700
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1. Read the annual reports & SEC filings, including footnotes. What's really
included, excluded, etc? Do the EPS #s included one-time charges for sale of
property, stuff like that.

2. Late last year, I added checking who did the auditing for stocks I owned
and was interested in to my research checklist. I found I was invested in no
companies with Arthur Andersen as their accountant (or at least not after
dumping ENE). I do NOT think ALL audits by AA were bad, but after Sunbeam,
Enron, Waste Management, etc, just seemed like a simple prudent extra step.

3. Watch for news using multiple sources. To an extent, the media is so
intent to catch the next ENE, that anything even hinting of stretching the
rules is likely to come up somewhere.

Very interested to hear what reasonable steps might be suggested from some
of the more experienced among us . . .

- -- Mona
  -----Original Message-----
  From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Ira Post
  Sent: Sunday, April 14, 2002 6:07 PM
  To: canslim@lists.xmission.com
  Subject: [CANSLIM] Validity of Earnings Reports


  This has become a huge issue in the last year.  I'm bringing it up to this
list because earnings growth is such an important part of CANSLIM.  What do
you do to protect yourselves from companies that fudge their real earnings?

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<DIV><SPAN class=3D820000504-15042002><FONT face=3DArial color=3D#0000ff =
size=3D2>1.=20
Read the annual reports &amp; SEC filings, including footnotes. What's =
really=20
included, excluded, etc? Do the EPS #s included one-time charges for =
sale of=20
property, stuff like that.</FONT></SPAN></DIV>
<DIV><SPAN class=3D820000504-15042002><FONT face=3DArial color=3D#0000ff =

size=3D2></FONT></SPAN>&nbsp;</DIV>
<DIV><SPAN class=3D820000504-15042002><FONT face=3DArial color=3D#0000ff =
size=3D2>2.=20
Late last year, I added checking who did the auditing for stocks I owned =
and was=20
interested in to my research checklist. I found I was invested in no =
companies=20
with Arthur Andersen as their accountant (or at least not after dumping =
ENE). I=20
do NOT think ALL audits by AA were bad, but after Sunbeam, Enron, Waste=20
Management, etc, just seemed like a simple prudent extra=20
step.</FONT></SPAN></DIV>
<DIV><SPAN class=3D820000504-15042002><FONT face=3DArial color=3D#0000ff =

size=3D2></FONT></SPAN>&nbsp;</DIV>
<DIV><SPAN class=3D820000504-15042002><FONT face=3DArial color=3D#0000ff =
size=3D2>3.=20
Watch for news using multiple sources. To an extent, the media is so =
intent to=20
catch the next ENE, that anything even hinting of stretching the rules =
is likely=20
to come up somewhere.</FONT></SPAN></DIV>
<DIV><SPAN class=3D820000504-15042002><FONT face=3DArial color=3D#0000ff =

size=3D2></FONT></SPAN>&nbsp;</DIV>
<DIV><SPAN class=3D820000504-15042002><FONT face=3DArial color=3D#0000ff =
size=3D2>Very=20
interested to hear what reasonable steps might be suggested from some of =
the=20
more experienced among us . . .</FONT></SPAN></DIV>
<DIV><SPAN class=3D820000504-15042002><FONT face=3DArial color=3D#0000ff =

size=3D2></FONT></SPAN>&nbsp;</DIV>
<DIV><SPAN class=3D820000504-15042002><FONT face=3DArial color=3D#0000ff =
size=3D2>--=20
Mona</FONT></SPAN></DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #0000ff 2px =
solid; MARGIN-RIGHT: 0px">
  <DIV class=3DOutlookMessageHeader dir=3Dltr align=3Dleft><FONT =
face=3DTahoma=20
  size=3D2>-----Original Message-----<BR><B>From:</B>=20
  owner-canslim@lists.xmission.com=20
  [mailto:owner-canslim@lists.xmission.com]<B>On Behalf Of </B>Ira=20
  Post<BR><B>Sent:</B> Sunday, April 14, 2002 6:07 PM<BR><B>To:</B>=20
  canslim@lists.xmission.com<BR><B>Subject:</B> [CANSLIM] Validity of =
Earnings=20
  Reports<BR><BR></FONT></DIV>
  <DIV><FONT face=3DArial size=3D2>This has become a huge issue in the =
last=20
  year.&nbsp; I'm bringing it up to this list because earnings growth is =
such an=20
  important part of CANSLIM.&nbsp; What do you do to protect yourselves =
from=20
  companies that fudge their real=20
earnings?</FONT></DIV></BLOCKQUOTE></BODY></HTML>

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