woiyo wrote : "Accounting is Accounting and US GAP is US GAP. "
well, enron invented its own accounting style supported by arthur anderson - who surely must have been reading the GAAP rules on occasion - ;
both are now "dead as a doornail".
i worked long enough as an accountant and later as auditor, to learn that accounting is not a science but an art.
of course there is GAAP (generally accepted acounting principles), but they are subject to quite a bit of interpretation. they are not fixed rules or law, but "principles" only.
that's one of the reasons investors are advised to study more than the "published financial statements of a corporation" .
the old rule of "investigate before you invest" still applies, because the statements published for public consumption will not always give you all the information you need for wise investing. hbg
Re: Bush economy surging ahead
dyslexia wrote:Wall Street endured its worst one-day session for almost three years on Friday as a sharp jump in the oil price and badly received figures from Citigroup (NYSE:C), General Electric and Motorola (NYSE:MOT) robbed the market of what was left of its early-year gains.
The Dow Jones Industrial Average slumped more than 200 points or 2 per cent to 10,666.99, its worst single-day performance since March 2003.
The broader S&P 500 lost 1.8 per cent to 1,261.43 while the tech-heavy Nasdaq Composite plunged 2.4 per cent to 2,247.70.
"It is a domino effect of negative news," said Marc Pado, chief market strategist at Cantor Fitzgerald.
The chief reason was a further undermining of already-dented investor confidence in corporate earnings. The culprits were some of the country's leading blue-chip companies, including financial services giant Citigroup, whose fourth-quarter earnings fell short of what the market had expected.
Only a few days shows this 200 point dip to be not too abnormal day of profit taking. Markets back over 11,000. Sorry to disappoint all the people hoping for bad news.
bush economy
...DOW JONES FIVE YEAR INDUSTRIAL AVERAGE...
a look at the above webchart will show that during the last five years the broad-based stockmarket hasn't done well at all.
anyone investing, let's say $10,000, in early 2001 would now just break even ! ... hardly a stellar performance, wouldn't you agree ?
while one needs to look at how the market is performing over short-term periods , the five-year and longer peformances are telling the true story .
one could have stored money under a mattress and would have come out just about as well - and no worries about the severe dip that took place in the meantime .
any comments on the great performance of the u.s. stockmarket during the last five years ? hbg
As I've said before on this forum, I think the economy can be likened to an ocean liner. It does not turn on a dime. Corrections take a while to see the effects. Plus I do not think the presidents can control the economy. They can advocate policies that may affect it slightly in small incremental ways, but often these policies may take months, if not years to see. Plus there are many cultural trends that affect our economic well being into the future. I personally think the stock market has a huge phsycological component. Investors are a bit like sheep, and there are periodic phases of jumping on or off the bandwagon, depending on certain factors, which may or may not be valid. And no matter what we do, the economy is cyclical by its very nature.
Also, the international economy affects us, and we cannot claim to control all aspects of this.
Another observation is that during the 90's, there was an internet/tech stock boom fueling the rise in the stock market, often for stocks that had made no money and weren't even projected to make money for a long time. It was based on hopes. Well, like everything else, prices based on hopes instead of actual performance had to come back to earth. I believe the stock market has been correcting for this for years now.
News reporting also affects the markets. It can focus on positive indicators or find those that aren't. There is always both around.
Lastly, when I go into Walmart and see virtually everything is made in China or places other than the U.S., that does not cause me to be optimistic.
okie wrote :
"As I've said before on this forum, I think the economy can be likened to an ocean liner. It does not turn on a dime. "
that's why i used the 5-year dow-jones index; it's a basket of all the major corporations and is used by most investors and economists as a pretty good indicator of ecomic behaviour.
okie wrote :
"Lastly, when I go into Walmart and see virtually everything is made in China or places other than the U.S., that does not cause me to be optimistic ."
since many (perhaps most) major corporations buy many of their goods in china(including electronics for defence operations) , we can hardly blame the average consumer to also do some shopping at walmart (i personally don't care much for walmart and am usually willing to pay a little more for the same or similar goods at some other store - even though they are still made in china - but that's a different story).
walmart executives think they are doing a great service for the american people (i don't know if you have watched one of several programs about walmart). they think that they provide good service and smart choices to the consumers . very difficult to argue against that. it's what's called 'free enterprise'. hbg
I agree the 5 year index is better than looking at shorter term periods. However, one could probably look back through history and see many 5 year periods of stagnation depending on where you bracket the graph. I still think the market is attractive for the future if you stay in long term, in the correct sectors.
Perhaps dislike for Walmart is a little like hating the Yankees for winning the World Series as often as they have in the past, especially during certain years. In contrast, I've heard of all the Cubs lovers, because they sort of love a lovable loser. I know this isn't a perfect analogy. Walmart got where it is by providing the best selection of products at the best price. Like other companies, I think they will become complacent, and rather entrenched in how they do things, and somebody with a better idea and more competitive energy will come along to displace Walmart. They will see their pinnacle. They may not yet have reached that pinnacle, but I am sure it will come at some point. If they don't, they would be quite unique indeed.
I don't particularly like Walmart either, but not because I just love to hate them, but rather for practical reasons. I don't particularly enjoy parking in the back 40 and walking a quarter of a mile to buy a couple of items that can easily be found somewhere else easier to access.
I think we as Americans need to rejuvinate that old "can do" attitude again, whereby we are willing to work for less wages to produce more products here. We need to revamp our health care system to make it more affordable. We need tort reform. We need to streamline regulations. We need to kick out the unions where appropriate. We need to reform the laws of corporations or our tax system to reduce the exorbitant salaries and perks for management. I happen to think a retail sales tax to replace the tired old income tax system would be an improvement. Many things serve as leaches on the system, bleeding us down from the healthy ability to compete. Such reforms would not restore all manufacuring of goods in the U.S., but it would improve it marginally, enough to make a significant improvement over where we are now.
@dyslexia,
I am writing from Istanbul, Turkey. We also have our own Bush (RT Erdogan).
The Turkish Market exhibits a replica of the Wall Street performance. Could you please refer me to sites where I can get NYSE performance for the last 6 years.
Thanks, Gultekin Orhon
