Go to Jeff Salisbury LWGate Home Page.From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] Validity of Earnings Reports
Date: Tue, 16 Apr 2002 23:17:35 -0400
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I am finally home, so will jump in. This is simply a personal quirk, even more a comfort factor, of mine. Since I only deal with small stocks, consistency is more important to me than a well established retailer, or clothing manufacturer, or other type company that traditionally has seasonal swings in earnings and sales. Since I don't like these industries anyway, I am not losing out on anything by excluding seasonal companies. But I do want to be able to establish my own mental expectations of upcoming revenues and earnings, and this is much easier to do with a company growing sequentially. Tom Worley stkguru@bellsouth.net AIM: TexWorley - ----- Original Message ----- From: "Harvey Brion" <hbrion@ieee.org> To: <canslim@lists.xmission.com> Sent: Tuesday, April 16, 2002 1:51 PM Subject: Re: [CANSLIM] Validity of Earnings Reports Don't want to speak for Tom, Ian. I think the year-over-year comparison is still quite valid. However, sequential growth suggests a business that does not have much seasonality associated with it, or a company that is growing so fast that the seasonality is not yet a dominant factor. -Harvey Ian wrote: > "I preferred stocks showing consistent top and bottom line growth both > sequentially and year to year" Tom: Isn't the 'requirement' for > sequential growth a recent artifact of the tech bubble? It seems to me > that both CANSLIM and growth investing had always allowed for business > seasonality - as long as the y-o-y numbers were solidly up for each > season, it was still considered a growth stock that could command a > premium valuation. Do you think this has changed? Do you think that > the 'blessed' stocks now demand sequential growth too? Thanks, Ian > > ----- Original Message ----- > From: Tom Worley > To: canslim@lists.xmission.com > Sent: Sunday, April 14, 2002 6:11 PM > Subject: Re: [CANSLIM] Validity of Earnings Reports > Ira, I don't think you can protect yourself from a company > that is deliberately falsifying their financials, or using > creative accounting to cover up real issues. you would have > to not only have an accounting degree, but go in and do an > independent audit, which is not practical. Best you can do > is look for consistency (and inconsistencies) in the 10Q and > 10K reports. Read Management's discussion. Question or dig > deeper into anything that doesn't make logical sense. Look > for any changes in accounting procedures from prior > periods. Even before Enron, I preferred stocks showing > consistent top and bottom line growth both sequentially and > year to year. Now, that is even more important to me. If > they are fudging, at least they are doing it > consistently. Tom Worley > stkguru@bellsouth.net > AIM: TexWorley > ----- Original Message ----- > From: Ira Post > To: canslim@lists.xmission.comSent: Sunday, April 14, 2002 > 9:06 PMSubject: [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? > - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email.
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