The Black Box

[sylvester80]

I find this part especially interesting (especially sisnce I did not think that was the case for the GAAP numbers).

"EARNINGS UPDATE: Earnings reporting for Q1 2003 is just beginning, and we can monitor the progress using the spreadsheet we download from the Standard & Poors web site. The latest is dated April 23 and about one-third of S&P 500 companies have reported Q1 results. It is interesting to watch original estimates being adjusted as actual results are reported. Most interesting is that pro forma estimates/results are moving higher (from $11.96 to $12.39), while GAAP results have moved slightly lower (from $11.43 to $11.40). This indicates that "earnings improvements" we are hearing about are being engineered in the pro forma dreamscape, not reality. Using Q1 GAAP estimates the P/E would be about 30.57, slightly improved over the 12-month period ending December 2002, but still grotesquely overvalued."

Thanks for the link. Very interesting reading.