Earnings
Goodwill Hunting…..When Goodwill Turns Bad
AOL write down of goodwill will create the widest difference between reported and operating earnings ever.
Is The Stock Market's Current P/E Dangerously High?
It is possible for new bull markets to emerge from high P/E levels. Earnings are cyclical, so when earnings decline in a recession, it can mark a very good buying opportunity despite high P/Es.
Answering Client Questions
Many of the questions in this month’s issue came from December’s client meetings in Chicago.
S&P's "Core" Earnings Methodology Losing Support?
We applauded S&P for developing a standardized approach which adjusts GAAP earnings for several problem accounting areas and produces a better representation of “True” earnings.
Are There Any "Good" Numbers These Days?
Revisions continue: How many revisions are possible?
View From The North Country
Corporate cleansing - undoubtedly, more fraud yet to be discovered, but real reform is now underway. Also, why the risk of extreme market behavior cannot be quantified.
Dealing With The Earnings Quagmire
A review of how companies can manipulate their earnings.
Tech Watch
Book to Bill ratio continues to improve. Some solid evidence that the prospects for the chipmakers are looking up.
Is This A Bear Market?
Is this a bear market? It certainly is a bear market in integrity! Steve presents the case for both Bears and Bulls.
Tech Watch
S&P Tech up slightly in January, but median PE ratio rises for 5th straight month as poor earnings are reported.
Normalizing Earnings Is Now Essential
Earnings are cyclical and the economic cycle causes distortions. A focus on which earnings to use and how to evaluate the differences.
Tech Watch
S&P Tech remained flat in December, but P/E ratios continue to climb as poor earnings are reported.
After The Rebound: Increased Caution
Market shrugged off bad news; but rally from the lows is almost a text book example of a bear market rally. Plus, Steve's current outlook regarding the Economy, Earnings, Inflation, and Interest Rates.
View From The North Country
Fiscal responsibility goes out the window in Washington. Also, The Bombastic Earnings Charade: Why are companies allowed to make up their own accounting rules?
Post Attack
Unlike most past market crises, a post-crisis rally did not immediately follow the September 11th Attack. October Expectations: The passage of time is beginning to moderate Wall Street’s debilitating pain. I think the stock market rebound rally could be about to get underway in earnest.
Earnings Contradictions
Earnings seem to be dependent on who the source is. S&P has taken a tougher line, excluding expenses that it considers part of “normal” operations.
The Importance Of Normalizing Earnings
Earnings are cyclical! This becomes especially obvious near peaks and troughs.
What About the Recession and the Awful Earnings?
The NBER (U.S. “recession judge”) often fails to label recessions until after they are over. Sector Earnings in 2001: Estimate operating earnings for the cap weighted measures will be down 15%, maybe 20%. Expect the economy will start to stabilize by year-end, and improve in early 2002.
Index Sector Weights and Comparisons With Sales and Earnings
New series compares index industry sector weights with sales and earnings contributions.
Earnings Down, Market Up
Some may disagree, but a number of classic bull market transition elements are in place. Also, falling Earnings are not reason to stay away from the stock market. Superior performance comes in the years earnings are falling the most.
Perception for the Professional
March 2026 Issue
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March 2026 Issue
