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Mix-Ansicht- Accounting Problems Part Of Post-Bubble Environment - Cosa, 16.07.2002, 11:15
Accounting Problems Part Of Post-Bubble Environment
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ein lesenswerter Artikel.....
<font size="4">Accounting Problems Part Of Post-Bubble Environment.</font>
By Charlie Minter from Comstock Partners,
We wouldn't read too much into today's sharp intra-day reversal as these are volatile
times in the market and moves tend to get exaggerated. The market remains in a major
post-bubble downtrend, and we have probably entered the capitulation stage where
investors decide that they cannot take the heat any more and throw in the towel. This
stage can take weeks to months and is likely to be interrupted by sharp bear market
rallies that should be sold. Even at current lower levels the S&P 500 is selling at a richly
valued 38 times trailing reported earnings and 24 times consensus 2002 estimates
that will probably be revised down. Coca Cola's move to expense stock options will
probably be adapted elsewhere and could slice another 10% off earnings, while the
SEC's new requirement for CEOs to certify the accuracy of financial statements should
lead to a new conservatism in financial reporting. This is a good thing to do, but is
another factor working to reduce reported earnings. Although the market will eventually
adjust to the new requirements, it will do so by dropping down to reflect the lower
earnings level.
The accounting problems should not be seen as an isolated occurrence but as an
integral part of the post-bubble malaise affecting the market. Both investors and the
media are just as much to blame for the bubble and its aftermath as accountants,
corporate management, boards of directors and Wall Street. While business
magazines today are denouncing all of the other parties, they joined the mania and
promoted it with unbridled enthusiasm. The May 29, 2000 cover of Business Week
touted,"Hot Growth Companies" and"Teen Moguls - How Kids Got Rich In
Cyberspace". It also featured a stock market debate on valuation in which two of the
three"experts" looked for the market to soar to even greater heights. When it came to
economics and finance there was no Woodward and Bernstein in sight even though
there was no necessity for Deep Throat since all the evidence other than outright fraud
was publicly available. We think the severe distortions built up during the mania will
take more time to correct, and that a market bottom is still some time away.
Mal sehen wie die Medien ihre eigene Rolle in der Entwicklung der Aktien-Bubble aufarbeiten wird.
Gruss
Cosa
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