Comments on: The Importance Of Earnings http://www.fwallstreet.com/article/22-the-importance-of-earnings/ Value Investing Blog Mon, 16 May 2011 10:55:06 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Joe Ponzio http://www.fwallstreet.com/article/22-the-importance-of-earnings/#comment-681 Joe Ponzio Fri, 02 Nov 2007 04:17:38 +0000 http://www.fwallstreet.com/article/22-the-importance-of-earnings#comment-681 Glenn, Absolutely - and that is not a bad thing. The more your company buys back stock, the more free cash flow and business you own. Ideally, the buybacks are being done at a discount to the business' true value; however, that is not always the case. Still, buybacks can have the "support" or "catalyst" affect. It's not really an "illusion" when you are investing in anything but extremely thinly traded securities. Glenn,

Absolutely – and that is not a bad thing. The more your company buys back stock, the more free cash flow and business you own.

Ideally, the buybacks are being done at a discount to the business’ true value; however, that is not always the case. Still, buybacks can have the “support” or “catalyst” affect. It’s not really an “illusion” when you are investing in anything but extremely thinly traded securities.

]]> By: Glenn http://www.fwallstreet.com/article/22-the-importance-of-earnings/#comment-665 Glenn Mon, 29 Oct 2007 21:25:26 +0000 http://www.fwallstreet.com/article/22-the-importance-of-earnings#comment-665 Joe, Can an ongoing stock buy back program create the illusion of free market investment when in fact the buy back program is actually the force that is supporting the stock price? Glenn Joe,

Can an ongoing stock buy back program create the illusion of free market investment when in fact the buy back program is actually the force that is supporting the stock price?

Glenn

]]> By: mm http://www.fwallstreet.com/article/22-the-importance-of-earnings/#comment-627 mm Thu, 25 Oct 2007 05:44:32 +0000 http://www.fwallstreet.com/article/22-the-importance-of-earnings#comment-627 The problem of fcf is when analysing financial comp.instead you can take the average earning for 7-10 years like Graham did and make discount model. for example i look at RDN. Average earnings for 10 years=363 growth rate =0% discount rate=20%(because of subprime crisis) present value=1.8B Market value=927mil Huge margin of safty!!! For more safty,Martin Whitman bought around 56$,a 77% loss(current price 13) The problem is buying a stock that is declining(now -9%) What is stronger geed or fear$ The problem of fcf is when analysing financial comp.instead you can take the average earning for 7-10 years like Graham did and make discount model.

for example i look at RDN.

Average earnings for 10 years=363

growth rate =0%

discount rate=20%(because of subprime crisis)

present value=1.8B

Market value=927mil

Huge margin of safty!!!

For more safty,Martin Whitman bought around 56$,a 77% loss(current price 13)

The problem is buying a stock that is declining(now -9%)

What is stronger geed or fear$

]]> By: Joe Ponzio http://www.fwallstreet.com/article/22-the-importance-of-earnings/#comment-622 Joe Ponzio Thu, 25 Oct 2007 05:21:04 +0000 http://www.fwallstreet.com/article/22-the-importance-of-earnings#comment-622 Thanks Justino! Thanks Justino!

]]> By: Justino http://www.fwallstreet.com/article/22-the-importance-of-earnings/#comment-614 Justino Tue, 23 Oct 2007 18:48:37 +0000 http://www.fwallstreet.com/article/22-the-importance-of-earnings#comment-614 Thank you, for your wonderful website! Thank you, for your wonderful website!

]]> By: Joe Ponzio http://www.fwallstreet.com/article/22-the-importance-of-earnings/#comment-49 Joe Ponzio Mon, 16 Jul 2007 10:19:58 +0000 http://www.fwallstreet.com/article/22-the-importance-of-earnings#comment-49 Look directly to the free cash flow - it is the best way to determine whether or not a business is growing. The accounting scandals of the early 2000s were just that - accounting scandals. They essentially used accounting tricks to hide the bad businesses of certain companies. Rather than looking at an accounting figure to figure out the health of a business, go straight to the source - the lifeblood of every business: Cash. Make sense? Look directly to the free cash flow – it is the best way to determine whether or not a business is growing. The accounting scandals of the early 2000s were just that – accounting scandals. They essentially used accounting tricks to hide the bad businesses of certain companies.

Rather than looking at an accounting figure to figure out the health of a business, go straight to the source – the lifeblood of every business: Cash.

Make sense?

]]> By: Tiago http://www.fwallstreet.com/article/22-the-importance-of-earnings/#comment-47 Tiago Mon, 16 Jul 2007 09:15:25 +0000 http://www.fwallstreet.com/article/22-the-importance-of-earnings#comment-47 Hello. So, where should we look instead of earnings? Thank You Tiago Hello.

So, where should we look instead of earnings?

Thank You

Tiago

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