Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: [CANSLIM] "M"
Date: Mon, 8 Jul 2002 13:06:52 -0500
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I hear what you're saying, jans, and good point on the cash flow issue. =
GAAP's a tool like all others, a set of accepted practices for =
reporting, but when companies are determined to fudge, they'll find a =
way to do it.. At the same time, I can't believe that companies are en =
masse trying to pull the wool over everybody's eyes and I have to =
believe that in the majority of cases that people are speaking the =
truth, though maybe only as they "know it." The good news is that I =
don't have to "believe" what MRK is saying, just let the chart speak. =
Gosh...RS=3D29, declining RS Line, declining 50 and 200dMA's, price well =
below both MA's.
P-U. A poster child for stinky stocks.
Katherine
- ----- Original Message -----=20
From: Spencer48@aol.com=20
To: canslim@lists.xmission.com=20
Sent: Monday, July 08, 2002 12:18 PM
Subject: Re: [CANSLIM] "M"
Katherine:
Not to mention (and in particular), Cash-Flow. Although with =
WorldCom=20
you can't even trust that anymore.
Come to think of it, though, why would "growth" make a =
difference. It=20
would, I agree, if the earnings were legitimate. But, with GAAP being =
a=20
loophole rather than an honest accounting, why can't earnings be =
mongrified=20
for more than 1 year, along with revenue? =20
Also, why believe Merck spokesmen when they explain how "butter =
wouldn't=20
melt in their mouth"? It seems that accounting practices nowadays are =
used=20
in order, not to reveal, but to hide company shenanigans.
jans
In a message dated 7/8/2002 9:42:51 AM Eastern Daylight Time,=20
kmalm@earthlink.net writes:
<< he Wall Street Journal, citing an SEC filing, reports that company=20
recorded $12.4 bln in revenue from its Medco pharmacy-benefits unit =
over the=20
past 3 years that the subsidiary never collected. According to the =
article,=20
Medco included as part of its revenue the co-payments collected by =
pharmacies=20
from patients, even though it doesn't receive those funds. Between =
1999 and=20
2001, co-payments comprised nearly 10% of Merck's overall reported =
revenue.=20
Merck first disclosed the accounting treatment in an April SEC filing =
for=20
Medco's IPO, but didn't disclose the amount of revenue involved until =
a=20
filing on Friday. Merck says the accounting treatment has no effect on =
its=20
net income because it subtracts the same amount as expense.=20
=20
=20
Accounting rules would allow this kind of treatment (even though it's =
a bit=20
silly to show the monies at all unless the co-payments run through =
their=20
hands at some point). Just goes to show why growth in earnings *AND* =
revenues=20
are equally important when doing a fundamental review.
>>
-
-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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<BODY bgColor=3D#ffffff>
<DIV>I hear what you're saying, jans, and good point on the cash flow=20
issue. GAAP's a tool like all others, a set of accepted practices =
for=20
reporting, but when companies are determined to fudge, they'll find a =
way to do=20
it.. At the same time, I can't believe that companies are en masse =
trying to=20
pull the wool over everybody's eyes and I have to believe that in the =
majority=20
of cases that people are speaking the truth, though maybe only as they =
"know=20
it." The good news is that I don't have to "believe" what MRK is =
saying,=20
just let the chart speak. Gosh...RS=3D29, declining RS Line, declining =
50 and=20
200dMA's, price well below both MA's.</DIV>
<DIV> </DIV>
<DIV>P-U. A poster child for stinky stocks.</DIV>
<DIV> </DIV>
<DIV>Katherine</DIV>
<DIV> </DIV>
<DIV>----- Original Message ----- </DIV>
<BLOCKQUOTE=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A title=3DSpencer48@aol.com=20
href=3D"mailto:Spencer48@aol.com">Spencer48@aol.com</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A =
title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Monday, July 08, 2002 =
12:18=20
PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] =
"M"</DIV>
<DIV><BR></DIV>Katherine:<BR><BR> Not to =
mention (and=20
in particular), Cash-Flow. Although with WorldCom <BR>you can't =
even=20
trust that anymore.<BR><BR> Come to think of =
it,=20
though, why would "growth" make a difference. It <BR>would, I =
agree, if=20
the earnings were legitimate. But, with GAAP being a =
<BR>loophole rather=20
than an honest accounting, why can't earnings be mongrified <BR>for =
more than=20
1 year, along with revenue? <BR><BR> =
Also, why=20
believe Merck spokesmen when they explain how "butter wouldn't =
<BR>melt in=20
their mouth"? It seems that accounting practices nowadays are =
used=20
<BR>in order, not to reveal, but to hide company=20
shenanigans.<BR><BR>jans<BR><BR>In a message dated 7/8/2002 9:42:51 AM =
Eastern=20
Daylight Time, <BR><A=20
href=3D"mailto:kmalm@earthlink.net">kmalm@earthlink.net</A>=20
writes:<BR><BR><< he Wall Street Journal, citing an SEC filing, =
reports=20
that company <BR>recorded $12.4 bln in revenue from its Medco=20
pharmacy-benefits unit over the <BR>past 3 years that the subsidiary =
never=20
collected. According to the article, <BR>Medco included as part of its =
revenue=20
the co-payments collected by pharmacies <BR>from patients, even though =
it=20
doesn't receive those funds. Between 1999 and <BR>2001, co-payments =
comprised=20
nearly 10% of Merck's overall reported revenue. <BR>Merck first =
disclosed the=20
accounting treatment in an April SEC filing for <BR>Medco's IPO, but =
didn't=20
disclose the amount of revenue involved until a <BR>filing on Friday. =
Merck=20
says the accounting treatment has no effect on its <BR>net income =
because it=20
subtracts the same amount as expense. =
<BR> <BR> <BR> Accounting=20
rules would allow this kind of treatment (even though it's a bit =
<BR>silly to=20
show the monies at all unless the co-payments run through their =
<BR>hands at=20
some point). Just goes to show why growth in earnings *AND* revenues =
<BR>are=20
equally important when doing a fundamental review.<BR> =20
>><BR><BR>-<BR>-To subscribe/unsubscribe, email "<A=20
=
href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>-In=
the=20
email body, write "subscribe canslim" or<BR>-"unsubscribe =
canslim". Do=20
not use quotes in your email.</BLOCKQUOTE></BODY></HTML>
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