Game changers

[roger that]

AMAZON’S EXAMPLE MIGHT be helping to change investment analysis, and even stock performance. Baruch Lev, an accounting professor at New York University, has documented a long decline in the relationship between stock returns and upside earnings surprises, or even earnings growth.

Traditional accounting, he says, fails to capture how spending on things like research and development adds to intangible assets that can power growth for years to come. Investors are left sifting for clues in measures that don’t necessarily show up in reports.