The Stingy News Weekly (01/18/02)
The Markets This Week
DOW 30: 9,771.85 -2.16% to a P/E of 27.0
TSE 300: 7,604.79 -1.26% with a negative P/E
The Value View
Dow at a P/E of 20: 7,238 (-25.9%) Poor Value
Dow at a P/E of 15: 5,429 (-44.4%) Fair Value
Dow at a P/E of 10: 3,619 (-63.0%) Good Value
Ranking the economic forecasters
"Only lawyers are the butt of more jokes than are economists. A recent report by Sweden's central bank, Sveriges Riskbank, drills down into the dismal track record of the dismal science with what the authors claim is uniquely comprehensive scope."
Behind Enron's fall
"Reports from FORTUNE's Bethany McLean and others that explain how the energy-trading giant ended up in collapse, and what the fallout will be."
Show me the earnings!
"In this surreal bubble-era in which we curiously find ourselves still languishing in the United States, the average stock investor seems to have totally forgotten that the only ultimate reason to own a given company is earnings!"
Regulators address concerns about non-GAAP earnings
"Canada's securities regulators are publishing guidance to address concerns about companies' widespread use of unconventional earnings measures."
Trump scores another first with SEC deal
"That makes The Donald, as the real estate and casino mogul is known in New York tabloids, the first chairman of the board to have his company cited for the abuse of 'pro forma earnings.'"
"Nevertheless, because of the attractiveness of dividend investing for those in the bottom tax bracket, and because of inefficiencies in the preferred share market, careful investors can be well rewarded as long as they pay attention to detail."
Advisor fees, revisited
"If management costs can reduce your return by 30 to 70 percent, new ways to make money don't mean very much. You'll still suffer the losses from excessive costs. The most productive step any investor can take to improve his long-term returns is to reduce the cost of investing."
The trivia questions this week are:
Q1. Who said "We all know that active management fees are high. Poor performance does not come cheap. You have to pay dearly for it."?
Q2. Who said "The hardest thing in the world to understand is the income tax."?
Q3. Who said "For those properly prepared in advance, a bear market in stocks is not a calamity but an opportunity"?
The answers for last week's trivia questions are:
Q1. Who said "I don't read economic forecasts. I don't read the funny papers."?
A1. Warren Buffett
Q2. Who said "An investor who has all the answers doesn't even understand the questions."?
A2. John Templeton
Q3. Who said "Markets can remain irrational longer than you can remain solvent."?
A3. John Maynard Keynes
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