Category Archives: Investing

Market Commentary – February 2003

Having progressed about half way through the quarter’s earnings reports, I am altering my view that the market remains severely overpriced. That judgment is true as determined by the price earnings ratio on the S&P-500, still about twenty-eight times earnings, but the reported number is skewered to the high side by many companies with losses … Continue reading Market Commentary – February 2003

Market Commentary – January 2003

Despite fair strength in recent months, and what appears to be a January effect in the most beaten down stocks, I think the evidence is that the bear market remains in force. If so, in another month the length of the decline will match the 1929-1932 bear market, though it is much milder in severity. That mildness may not be good, for despite the long decline stocks remain high priced. In the spring the bear market would enter its fourth year, which would raise the question, are we in a Japanese style decline, now in its thirteenth year?

Utility Stocks – September 2002

One of the most confounding aspects of the bear market is the collapse of stocks that were seen as safe. I am not referring to GE, which was known to be playing games with its accounting and was selling at much too high a price, but specifically to utility stocks. The collapse would not have been a great surprise if investors had understood the extent to which utility companies had turned away from their conservative past and gone off in speculative directions. The stocks are down so much that they probably offer one of the best opportunities in the market, but figuring out how to act on the opening is difficult because the condition of the companies is up in the air.

Enron – January 2001

This chapter was written long before the Enron debacle came to light, in fact it is about the inevitability of Enrons because of wholesale cheating to boost reported earnings. Enron was not the exception, it was the rule. Enron undoubtedly passed the line and broke accounting rules, but the majority of publicly held companies push as close to the line as possible in order to enhance reported earnings. Arthur Anderson, its auditor, is not a rotten apple, all the major accounting firms aid and abet the process of overstating earnings.