According to The Economist of the last three weeks, shenanigans are coming. Company are going to cook the books the third quarter, what are the best sources to understand the figures if creative accounting should arise? I have a couple of books but could be outdated, maybe NO GAAP, operative cash, inventory, smooth sales? Too much difficult subject depending by industry I guess, which indicators should be interpretation neutral?
Questionable figures on 3Q? -Fundamental-Value Investing
- Thread starter Ivano
- Start date
by the time you get it its too late
Impossible to detect unless you happen to do a financial audit of the books.
Financial engineering is not cooking the books.
so why everybody makes claims fundamental analysis is the swiss tool for value (intelligent?) investors? If companies can do whatever they lilke with their digits what sense has any kind of P&L and balance sheet analysis? I mean Lehman had an insane amount of debts in the figures when they crashed
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I've NEVER heard anyone speak that highly of fundamentalist analysis.
Fundamentals + funds maybe fun/helpful; but ''whatever they like with digets '' is false/false.
And since the markets tend to look 6 months ahead+ so many different kinds of traders/investors in the market, price data may or may not help you=it helps mw...……………………………………………………………………………………………………………..
You asked about cooking books which is totally different.
Fundamental analysis for investment decisions is completely different.
If it is the later you look at the source of revenues reported. There are models such as dividend growth / free cash flow etc.
There is enough information in the internet about how to do this. You need some competency on finance / statistics / probabity etc.these are not for garden variety ppl.
Goto guru.com and look at a company that you want. They do the math for you.
Fundamental analysis for investment decisions is completely different.
If it is the later you look at the source of revenues reported. There are models such as dividend growth / free cash flow etc.
There is enough information in the internet about how to do this. You need some competency on finance / statistics / probabity etc.these are not for garden variety ppl.
Goto guru.com and look at a company that you want. They do the math for you.
@murray t turtle thank you very much, well there are qualitative things to observe, not only digits. Operational risk, management reputation, company rumors(Christmas parties, annual gifts, hiring company), earnings, dividends, expansion, strategic plans, freakonomics things, psychology of the market, payments, stakeholders, trends, competition, demand in the field, technology, and every kind of demographic(sure statistics) on their mktg target, transfer pricing fiscal aggressiveness, shareholders letter, operational risks. I guess all this should fall into fundamental analysis because does not have nothing to do with observing the securities graphs. Also monitoring digits, one can have some insights. Are the sales growing the same every year, did they report losses sometimes, did they change their evaluations methods, did they increases accruals? But I get the point I do not have to trust financials, and moreover is not relevant because are old.
@Girija thank you for your information in fundamental analysis the published reports have a weight I guess, I did for a living analyses/evaluations on companies since more than 12 years, as kinda CPA/data scientist and even sw developer in the financial sector, so I get what you say but I always evaluated the financials, even if are fake give you insights seeing at least 5 years variations. And if are fake Is also clear why a company wants to communicate in a certain way instead of another. Anyway is clear that auditing has limits for multinationals. your and turtle feedback is really useful to me, thank you again.
@Girija thank you for your information in fundamental analysis the published reports have a weight I guess, I did for a living analyses/evaluations on companies since more than 12 years, as kinda CPA/data scientist and even sw developer in the financial sector, so I get what you say but I always evaluated the financials, even if are fake give you insights seeing at least 5 years variations. And if are fake Is also clear why a company wants to communicate in a certain way instead of another. Anyway is clear that auditing has limits for multinationals. your and turtle feedback is really useful to me, thank you again.
That's why its good to look at stocks that are in a business you understand, or that are easy to understand. Also, you should always listen to or read the transcripts of the conference calls. Analysts ask some pretty poignant questions.
Thank you lol.
I was just trying to remember the name of that website the other day. I had it bookmarked last year and lost it. I couldn't remember the name for the life of me. That's the one though. They do a good job. thnx
https://finance.yahoo.com/quote/RVT?p=RVT
Over the years this is the ONE company I trust for value. They do a VERY DETAILED evaluation of the companies they own. They talk to the management, they look deeply into the books. They see if they are growing market share, debt. They may visit an on site location...Very detailed. If management is being paid too much, they just move on.
Mr. Royce is ready to retire...I've held his stock for 30+ years. The team he has put together is just amazing!! Plus the bow tie creates MORE trust for me!! Look at his top ten picks...Live and learn. The ones that are dropped from the list have grown so much. They have been sold and they find others.
http://www.roycefunds.com/funds/royce-value-trust/xrvtx
Over the years this is the ONE company I trust for value. They do a VERY DETAILED evaluation of the companies they own. They talk to the management, they look deeply into the books. They see if they are growing market share, debt. They may visit an on site location...Very detailed. If management is being paid too much, they just move on.
Mr. Royce is ready to retire...I've held his stock for 30+ years. The team he has put together is just amazing!! Plus the bow tie creates MORE trust for me!! Look at his top ten picks...Live and learn. The ones that are dropped from the list have grown so much. They have been sold and they find others.
http://www.roycefunds.com/funds/royce-value-trust/xrvtx
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thank you for the site, it looks like a nice person this Mr Royce, hope had a life full of nice trades. and @vanzandt thank you very much for your suggestion, is really a good idea to hear the investor conferences,and also see some legal inside trading from management. I forgot to add this to my list