Zenvestor

Earnings Season: Fundamentally Flawed

Great article! I'll go one step further though. A very small percentage of investors sell short, so the only way for analysts to make commisions and feed their families is to be bullish - even in a bear market. That way, they can convince their clients to pour more money into companies that are on their last legs. If you think the state of the financial sector is bad now - wait to see what the barren landscape will be in 1 year. The pain is only beginning. There's no doubt in my mind that analysts are manipulating the perennial bulls by creating estimates that are far below what the company will actually report. When people are willing to invest their hard earned money in a company that's lost $17.4 Billion in only 3 quarters, I am absolutely shocked. What is $17.4 Billion? It's 35% of the entire Federal Deposit Insurance Corporaton's asset base of $50 Billion. There's a reason why this site seems to be bearish. That's because we're in the beginning of a long bear market!

Lehman Brothers: Accomplishing What Bear Could Not?

With all due respect, I don't agree with evaluating the potential of a company simply based on what a handful of institutional investors may or may not do. After all, if one was to base one's investment decisions simply on what the rest of the crowd is doing, you would have invested heavily in subprime mortgages two years ago. You are assuming that institutional investors are somehow a measure of "prudent" investing. And as we all know, the last year has proven that even the venerable UBS made some astoundingly imprudent investments. Fundamental analysis of Bear Stearns is the only true measure of Lehman's health and that's what Einhorn is doing.