From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #2072 Reply-To: canslim Sender: owner-canslim-digest@lists.xmission.com Errors-To: owner-canslim-digest@lists.xmission.com Precedence: bulk Content-Transfer-Encoding: quoted-printable X-No-Archive: yes canslim-digest Tuesday, January 22 2002 Volume 02 : Number 2072 In this issue: [CANSLIM] Off Topic - KMart again [CANSLIM] KMart vs Enron [CANSLIM] PSFT: More accounting shenanigans? Re: [CANSLIM] KMart vs Enron Re: [CANSLIM] PSFT: More accounting shenanigans? Re: [CANSLIM] PSFT: More accounting shenanigans? ---------------------------------------------------------------------- Date: Tue, 22 Jan 2002 04:05:09 -0500 From: "Tom Worley" Subject: [CANSLIM] Off Topic - KMart again This is a multi-part message in MIME format. - ------=_NextPart_000_0036_01C1A2F9.FB60DC30 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable looks like more suppliers have suspended shipments, and speculation is = that KM will file bankruptcy later today. Speculation also that they will close 250 to 500 stores. Tom Worley stkguru@netside.net AIM: TexWorley - ------=_NextPart_000_0036_01C1A2F9.FB60DC30 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
looks like more suppliers have suspended = shipments, and=20 speculation is that KM will file bankruptcy later today.
 
Speculation also that they will close 250 to 500 = stores.
 
Tom Worley
stkguru@netside.net
AIM:=20 TexWorley
- ------=_NextPart_000_0036_01C1A2F9.FB60DC30-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Tue, 22 Jan 2002 11:27:45 -0500 From: "Tom Worley" Subject: [CANSLIM] KMart vs Enron This is a multi-part message in MIME format. - ------=_NextPart_000_0015_01C1A337.D033A9A0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Today's bankruptcy filing by KMart opens a lot of questions, starting = with which will be the bigger story, KM or ENE? Both are huge bankruptcies, ENE likely to remain the biggest, but KM is = the largest by a retailer. And with over 2,100 brick and mortar stores, = many of which will likely be closed, going to have a significant impact = on employment. ENE died because of financial shenanigans and corrupt insider deals, = lots of lies and plenty of places to put the blame, including on the = auditors. KM will likely survive, but take a year or more, and emerge as much = smaller and less competitive. Since it already proved it cannot stand = against Walmart and Target, questionable in my mind what it can do = differently as a smaller retail chain. Was this only stiff competition = in a recession, or poor management as well? With KM down 54% just for today, and 94% since its last high on 8/8/01, = who can you trust anymore in the executive level of corporations. Today = makes me glad I stick to my small caps, where a rumored buyout finally = official gave me a 10% gain on one stock, and a new contract gave me 13% = on another. Big caps are just too big and complicated for the likes of = me. At least I make money for the day. Tom Worley stkguru@netside.net AIM: TexWorley - ------=_NextPart_000_0015_01C1A337.D033A9A0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Today's bankruptcy filing by KMart opens a lot = of=20 questions, starting with which will be the bigger story, KM or = ENE?
 
Both are huge bankruptcies, ENE likely to remain = the=20 biggest, but KM is the largest by a retailer. And with over 2,100 brick = and=20 mortar stores, many of which will likely be closed, going to have a = significant=20 impact on employment.
 
ENE died because of financial shenanigans and = corrupt=20 insider deals, lots of lies and plenty of places to put the blame, = including on=20 the auditors.
 
KM will likely survive, but take a year or more, = and=20 emerge as much smaller and less competitive. Since it already proved it = cannot=20 stand against Walmart and Target, questionable in my mind what it can do = differently as a smaller retail chain. Was this only stiff competition = in a=20 recession, or poor management as well?
 
With KM down 54% just for today, and 94% since = its last=20 high on 8/8/01, who can you trust anymore in the executive level of=20 corporations. Today makes me glad I stick to my small caps, where a = rumored=20 buyout finally official gave me a 10% gain on one stock, and a new = contract gave=20 me 13% on another. Big caps are just too big and complicated for the = likes of=20 me. At least I make money for the day.
 
Tom Worley
stkguru@netside.net
AIM:=20 TexWorley
- ------=_NextPart_000_0015_01C1A337.D033A9A0-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Tue, 22 Jan 2002 10:45:01 -0600 From: "Katherine Malm" Subject: [CANSLIM] PSFT: More accounting shenanigans? This is a multi-part message in MIME format. - ------=_NextPart_000_006C_01C1A331.D804C200 Content-Type: multipart/alternative; boundary="----=_NextPart_001_006D_01C1A331.D804C200" - ------=_NextPart_001_006D_01C1A331.D804C200 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Once more into the fire. Think this will become the "year of the = accounting case study." - --Katherine This from Briefing.com Archives In Play=AE all dates =20 Date (ET) Archive Article=20 Jan 22 2002 11:06 AM In Play PeopleSoft (PSFT) 33.45 -1.89 (-5.4%): -- Update = - -- This is not the first time that concerns about accounting at the = Momentum unit have been brought to light. On Jan 2, Briefing.com = reported a Lehman defense of the stk following a 12/31 Bloomberg article = indicating that PSFT might repurchase its Momentum Business Applications = unit to avoid paying royalties. Lehman predicted that PSFT was likely to = purchase Momentum for about $90 mln within the next few qtrs. Firm did = not think there were accounting irregularities and viewed the issue as = likely overblown.=20 Jan 22 2002 10:53 AM In Play PeopleSoft (PSFT) 34.37 -0.97 (-2.7%): = - --Update-- According to the San Jose Mercury article, PeopleSoft hired = that subsidiary, Momentum Business Applications, to write new software, = and Momentum, in turn, hired PeopleSoft programmers at a markup. The = arrangement transformed the high cost of creating new programs into a = source of revenue for PeopleSoft.=20 Jan 22 2002 10:49 AM In Play PeopleSoft (PSFT) 34.32 -1.02 (-2.9%): Accounting = concerns again putting pressure on PSFT shares. The San Jose Mercury = News reports that an accounting maneuver by former PSFT head allowed = company to avoid crushing development costs. Six months before stepping = aside, PSFT co-founder David A. Duffield transferred $250 million to a = newly created subsidiary with just one employee and an office down the = road from PeopleSoft headquarters. Peter Knutson, an associate professor = emeritus of accounting at the University of Pennsylvania's Wharton = School, believes the arrangement misled investors: 'It is within the = boundaries of generally accepted accounting principles, but it is really = an intent to deceive.' =20 - ------=_NextPart_001_006D_01C1A331.D804C200 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Once more into the fire. Think this will become the "year of = the=20 accounting case study."
 
--Katherine
 
 This from Briefing.com
 
Archives In = Play=AE all=20 dates
Date (ET) Archive Article
Jan 22 = 2002
11:06 AM		 In = Play PeopleSoft (PSFT) 33.45 = - -1.89 (-5.4%):=20 -- Update -- This is not the first time that concerns about = accounting at=20 the Momentum unit have been brought to light. On Jan 2, = Briefing.com=20 reported a Lehman defense of the stk following a 12/31 Bloomberg = article=20 indicating that PSFT might repurchase its Momentum Business = Applications=20 unit to avoid paying royalties. Lehman predicted=20 that PSFT was likely to purchase Momentum for about $90 = mln=20 within the next few qtrs. Firm did not think there were=20 accounting irregularities and viewed the issue as likely=20 overblown.
Jan 22 = 2002
10:53 AM		 In Play PeopleSoft (PSFT) 34.37 -0.97 (-2.7%): =  --Update--=20 According to the San Jose Mercury article, PeopleSoft hired that=20 subsidiary, Momentum Business Applications, to write new software, = and=20 Momentum, in turn, hired PeopleSoft programmers at a markup. The=20 arrangement transformed the high cost of creating new programs = into a=20 source of revenue for PeopleSoft.
Jan 22 = 2002
10:49 AM		 In = Play
PeopleSoft (PSFT) 34.32 -1.02 (-2.9%): Accounting concerns = again=20 putting pressure on PSFT shares. The San Jose Mercury News reports = that an=20 accounting maneuver by former PSFT head allowed company to avoid = crushing=20 development costs. Six months before stepping aside, PSFT = co-founder David=20 A. Duffield transferred $250 million to a newly created subsidiary = with=20 just one employee and an office down the road from PeopleSoft=20 headquarters. Peter Knutson, an associate professor emeritus of = accounting=20 at the University of Pennsylvania's Wharton School, believes the=20 arrangement misled investors: 'It is within the boundaries of = generally=20 accepted accounting principles, but it is really an intent to=20 deceive.'
 
 
- ------=_NextPart_001_006D_01C1A331.D804C200-- - ------=_NextPart_000_006C_01C1A331.D804C200 Content-Type: image/gif; name="show_headline.gif" Content-Transfer-Encoding: base64 Content-Location: http://www.briefing.com/images/briefing/show_headline.gif R0lGODlhTgAXALMAAElrdVV7h6GhoTRLUwsPEBsmKiU0Od3d3VNTU9TU1Ly8vG5vbz5bZCs+RPz6 2oWFhSH5BAAAAAAALAAAAABOABcAAAT/kMhJq7046827/2BYBWRpnmiqrmyrSgXhznRtm0Sh33zv 6zufcMjSGQzEpJJ0bCBUjijJwaOWrC2qludENFLY7Q0bIK/EPMQAgQC43wAHPE53R+X1PN5ux0ff d3RygX1zcGxshn1+g3qCend/foB1jY2PeXNsCwsADJ6gn56Dnw4MpqOPqHGfpXF3p1Gnrqa1tIGi rQCcnAy+v7O+trOmwsbFxr/DwcO2zcHA0ZwPDwPWDNbWd9rcsQ7Z39/g2QPiUQPe2ufh5dzl4uTZ 1NTx9fb3+PcN+fz41AICGggcSLCgwYMIEypciBAgwCMQI0qcSLGixYsYLToUYACIx48gT0OKHEmy JEmAChSYXMmypUuPKVNaiJGDAs2aOHPipMmzQk+dP2EI3ZkyQQIRSJOGMMo0wYGmUKNKnUr1KdWq V5ke2Mq1q9evYMOKHUu2bAQAOw== - ------=_NextPart_000_006C_01C1A331.D804C200-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Tue, 22 Jan 2002 10:51:59 -0600 From: "Katherine Malm" Subject: Re: [CANSLIM] KMart vs Enron This is a multi-part message in MIME format. - ------=_NextPart_000_0076_01C1A332.D1383AA0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable I see a biggest difference in the ENE vs KM story as a lesson in = capitalism. That is, when a business becomes redundant or has lost its = strategic advantage, it disappears. I'm sorry for the KM shareholders, = but KM's inability to buck up and smell the market before it was too = late has put it where it is today. WMT redefined discount retailing, TGT = created a targeted demographic twist, NDN and DG segmented and = subdivided the "big store" into small local stores reminiscent of the = old 5 and dime, BBBY and LIN created a unique niche, etc. I'd go to KM = to buy Martha Stewart goodies, but I don't even know where there's a = store in town! Bad locations, bad strategies, bad execution, didn't "own = up" to the problem until it was many years too late. Bye-bye KM. Katherine ----- Original Message -----=20 From: Tom Worley=20 To: canslim@lists.xmission.com=20 Sent: Tuesday, January 22, 2002 10:27 AM Subject: [CANSLIM] KMart vs Enron Today's bankruptcy filing by KMart opens a lot of questions, starting = with which will be the bigger story, KM or ENE? Both are huge bankruptcies, ENE likely to remain the biggest, but KM = is the largest by a retailer. And with over 2,100 brick and mortar = stores, many of which will likely be closed, going to have a significant = impact on employment. ENE died because of financial shenanigans and corrupt insider deals, = lots of lies and plenty of places to put the blame, including on the = auditors. KM will likely survive, but take a year or more, and emerge as much = smaller and less competitive. Since it already proved it cannot stand = against Walmart and Target, questionable in my mind what it can do = differently as a smaller retail chain. Was this only stiff competition = in a recession, or poor management as well? With KM down 54% just for today, and 94% since its last high on = 8/8/01, who can you trust anymore in the executive level of = corporations. Today makes me glad I stick to my small caps, where a = rumored buyout finally official gave me a 10% gain on one stock, and a = new contract gave me 13% on another. Big caps are just too big and = complicated for the likes of me. At least I make money for the day. Tom Worley stkguru@netside.net AIM: TexWorley - ------=_NextPart_000_0076_01C1A332.D1383AA0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
I see a biggest difference in the ENE vs KM story as a lesson in=20 capitalism. That is, when a business becomes redundant or has lost its = strategic=20 advantage, it disappears. I'm sorry for the KM shareholders, but KM's = inability=20 to buck up and smell the market before it was too late has put it where = it is=20 today. WMT redefined discount retailing, TGT created a targeted = demographic=20 twist, NDN and DG segmented and subdivided the "big store" into small = local=20 stores reminiscent of the old 5 and dime, BBBY and LIN created a unique = niche,=20 etc. I'd go to KM to buy Martha Stewart goodies, but I don't even know = where=20 there's a store in town! Bad locations, bad strategies, bad execution, = didn't=20 "own up" to the problem until it was many years too late. Bye-bye = KM.
 
Katherine
----- Original Message -----
From:=20 Tom = Worley=20
Sent: Tuesday, January 22, 2002 = 10:27=20 AM
Subject: [CANSLIM] KMart vs = Enron

Today's bankruptcy filing by KMart opens a lot = of=20 questions, starting with which will be the bigger story, KM or=20 ENE?
 
Both are huge bankruptcies, ENE likely to = remain the=20 biggest, but KM is the largest by a retailer. And with over 2,100 = brick and=20 mortar stores, many of which will likely be closed, going to have a=20 significant impact on employment.
 
ENE died because of financial shenanigans and = corrupt=20 insider deals, lots of lies and plenty of places to put the blame, = including=20 on the auditors.
 
KM will likely survive, but take a year or = more, and=20 emerge as much smaller and less competitive. Since it already proved = it cannot=20 stand against Walmart and Target, questionable in my mind what it can = do=20 differently as a smaller retail chain. Was this only stiff competition = in a=20 recession, or poor management as well?
 
With KM down 54% just for today, and 94% since = its last=20 high on 8/8/01, who can you trust anymore in the executive level of=20 corporations. Today makes me glad I stick to my small caps, where a = rumored=20 buyout finally official gave me a 10% gain on one stock, and a new = contract=20 gave me 13% on another. Big caps are just too big and complicated for = the=20 likes of me. At least I make money for the day.
 
Tom Worley
stkguru@netside.net
AIM:=20 TexWorley
- ------=_NextPart_000_0076_01C1A332.D1383AA0-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Tue, 22 Jan 2002 11:52:20 -0500 From: "Tom Worley" Subject: Re: [CANSLIM] PSFT: More accounting shenanigans? This is a multi-part message in MIME format. - ------=_NextPart_000_0032_01C1A33B.3F9CC080 Content-Type: multipart/alternative; boundary="----=_NextPart_001_0033_01C1A33B.3F9CC080" - ------=_NextPart_001_0033_01C1A33B.3F9CC080 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable so, how can small investors detect, much less avoid, these kinds of = slick tricks? Tom Worley stkguru@netside.net AIM: TexWorley ----- Original Message -----=20 From: Katherine Malm=20 To: canslim@lists.xmission.com=20 Sent: Tuesday, January 22, 2002 11:45 AM Subject: [CANSLIM] PSFT: More accounting shenanigans? Once more into the fire. Think this will become the "year of the = accounting case study." --Katherine This from Briefing.com Archives In Play=AE all dates =20 Date (ET) Archive Article=20 Jan 22 2002 11:06 AM In Play PeopleSoft (PSFT) 33.45 -1.89 (-5.4%): -- = Update -- This is not the first time that concerns about accounting at = the Momentum unit have been brought to light. On Jan 2, Briefing.com = reported a Lehman defense of the stk following a 12/31 Bloomberg article = indicating that PSFT might repurchase its Momentum Business Applications = unit to avoid paying royalties. Lehman predicted that PSFT was likely to = purchase Momentum for about $90 mln within the next few qtrs. Firm did = not think there were accounting irregularities and viewed the issue as = likely overblown.=20 Jan 22 2002 10:53 AM In Play PeopleSoft (PSFT) 34.37 -0.97 (-2.7%): = - --Update-- According to the San Jose Mercury article, PeopleSoft hired = that subsidiary, Momentum Business Applications, to write new software, = and Momentum, in turn, hired PeopleSoft programmers at a markup. The = arrangement transformed the high cost of creating new programs into a = source of revenue for PeopleSoft.=20 Jan 22 2002 10:49 AM In Play PeopleSoft (PSFT) 34.32 -1.02 (-2.9%): = Accounting concerns again putting pressure on PSFT shares. The San Jose = Mercury News reports that an accounting maneuver by former PSFT head = allowed company to avoid crushing development costs. Six months before = stepping aside, PSFT co-founder David A. Duffield transferred $250 = million to a newly created subsidiary with just one employee and an = office down the road from PeopleSoft headquarters. Peter Knutson, an = associate professor emeritus of accounting at the University of = Pennsylvania's Wharton School, believes the arrangement misled = investors: 'It is within the boundaries of generally accepted accounting = principles, but it is really an intent to deceive.' =20 - ------=_NextPart_001_0033_01C1A33B.3F9CC080 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
so, how can small investors detect, much less = avoid, these=20 kinds of slick tricks?
 
Tom Worley
stkguru@netside.net
AIM:=20 TexWorley
----- Original Message -----
From:=20 Katherine=20 Malm
Sent: Tuesday, January 22, 2002 = 11:45=20 AM
Subject: [CANSLIM] PSFT: More = accounting=20 shenanigans?

Once more into the fire. Think this will become the "year of = the=20 accounting case study."
 
--Katherine
 
 This from Briefing.com
 
Archives In = Play=AE=20 all dates
Date (ET) Archive Article
Jan 22 = 2002
11:06 AM		 In = Play PeopleSoft (PSFT) 33.45 = - -1.89=20 (-5.4%): -- Update -- This is not the first time that concerns = about=20 accounting at the Momentum unit have been brought to light. On = Jan 2,=20 Briefing.com reported a Lehman defense of the stk following a = 12/31=20 Bloomberg article indicating that PSFT might repurchase its = Momentum=20 Business Applications unit to avoid paying royalties.=20 Lehman predicted that PSFT was likely to purchase = Momentum for about $90 mln within the next few qtrs. Firm did = not think=20 there were accounting irregularities and viewed the = issue as=20 likely overblown.
Jan 22 = 2002
10:53 AM		 In Play PeopleSoft (PSFT) 34.37 -0.97 (-2.7%): =  --Update--=20 According to the San Jose Mercury article, PeopleSoft hired that = subsidiary, Momentum Business Applications, to write new = software, and=20 Momentum, in turn, hired PeopleSoft programmers at a markup. The = arrangement transformed the high cost of creating new programs = into a=20 source of revenue for PeopleSoft.
Jan 22 = 2002
10:49 AM		 In = Play
PeopleSoft (PSFT) 34.32 -1.02 (-2.9%): Accounting concerns = again=20 putting pressure on PSFT shares. The San Jose Mercury News = reports that=20 an accounting maneuver by former PSFT head allowed company to = avoid=20 crushing development costs. Six months before stepping aside, = PSFT=20 co-founder David A. Duffield transferred $250 million to a newly = created=20 subsidiary with just one employee and an office down the road = from=20 PeopleSoft headquarters. Peter Knutson, an associate professor = emeritus=20 of accounting at the University of Pennsylvania's Wharton = School,=20 believes the arrangement misled investors: 'It is within the = boundaries=20 of generally accepted accounting principles, but it is really an = intent=20 to deceive.'
 
=
 
- ------=_NextPart_001_0033_01C1A33B.3F9CC080-- - ------=_NextPart_000_0032_01C1A33B.3F9CC080 Content-Type: image/gif; name="show_headline.gif" Content-Transfer-Encoding: base64 Content-Location: http://www.briefing.com/images/briefing/show_headline.gif R0lGODlhTgAXALMAAElrdVV7h6GhoTRLUwsPEBsmKiU0Od3d3VNTU9TU1Ly8vG5vbz5bZCs+RPz6 2oWFhSH5BAAAAAAALAAAAABOABcAAAT/kMhJq7046827/2BYBWRpnmiqrmyrSgXhznRtm0Sh33zv 6zufcMjSGQzEpJJ0bCBUjijJwaOWrC2qludENFLY7Q0bIK/EPMQAgQC43wAHPE53R+X1PN5ux0ff d3RygX1zcGxshn1+g3qCend/foB1jY2PeXNsCwsADJ6gn56Dnw4MpqOPqHGfpXF3p1Gnrqa1tIGi rQCcnAy+v7O+trOmwsbFxr/DwcO2zcHA0ZwPDwPWDNbWd9rcsQ7Z39/g2QPiUQPe2ufh5dzl4uTZ 1NTx9fb3+PcN+fz41AICGggcSLCgwYMIEypciBAgwCMQI0qcSLGixYsYLToUYACIx48gT0OKHEmy JEmAChSYXMmypUuPKVNaiJGDAs2aOHPipMmzQk+dP2EI3ZkyQQIRSJOGMMo0wYGmUKNKnUr1KdWq V5ke2Mq1q9evYMOKHUu2bAQAOw== - ------=_NextPart_000_0032_01C1A33B.3F9CC080-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Tue, 22 Jan 2002 11:04:09 -0600 From: "Katherine Malm" Subject: Re: [CANSLIM] PSFT: More accounting shenanigans? This is a multi-part message in MIME format. - ------=_NextPart_000_0083_01C1A334.8470DAE0 Content-Type: multipart/alternative; boundary="----=_NextPart_001_0084_01C1A334.8470DAE0" - ------=_NextPart_001_0084_01C1A334.8470DAE0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Hate to say it, but there's no substitution for a good read of the 10Q's = and 10K's in combination with a good review of past news stories. Any = yellow flags in the news stories should warrant a deeper dive into the = financials. Any "odd" comments or financial "oddities" in the financial = statements can be noted and investigated. (I always head straight for = the management discussion of results and the pending legal actions = sections. Then look for odd accounting footnotes in the financials.) = Can't catch them all, but without the due diligence, there's *no* chance = of catching them. If a stock has too many yellow flags during DD, I just = cross it off the list. There's plenty of fish in the sea. Despite all = that, technical action usually speaks for these stocks long before the = historical fundamentals "explain" the problems. Investors who don't = combine technical/fundamental work miss the clues. Katherine ----- Original Message -----=20 From: Tom Worley=20 To: canslim@lists.xmission.com=20 Sent: Tuesday, January 22, 2002 10:52 AM Subject: Re: [CANSLIM] PSFT: More accounting shenanigans? so, how can small investors detect, much less avoid, these kinds of = slick tricks? Tom Worley stkguru@netside.net AIM: TexWorley ----- Original Message -----=20 From: Katherine Malm=20 To: canslim@lists.xmission.com=20 Sent: Tuesday, January 22, 2002 11:45 AM Subject: [CANSLIM] PSFT: More accounting shenanigans? Once more into the fire. Think this will become the "year of the = accounting case study." --Katherine This from Briefing.com Archives In Play=AE all dates =20 Date (ET) Archive Article=20 Jan 22 2002 11:06 AM In Play PeopleSoft (PSFT) 33.45 -1.89 (-5.4%): -- = Update -- This is not the first time that concerns about accounting at = the Momentum unit have been brought to light. On Jan 2, Briefing.com = reported a Lehman defense of the stk following a 12/31 Bloomberg article = indicating that PSFT might repurchase its Momentum Business Applications = unit to avoid paying royalties. Lehman predicted that PSFT was likely to = purchase Momentum for about $90 mln within the next few qtrs. Firm did = not think there were accounting irregularities and viewed the issue as = likely overblown.=20 Jan 22 2002 10:53 AM In Play PeopleSoft (PSFT) 34.37 -0.97 (-2.7%): = - --Update-- According to the San Jose Mercury article, PeopleSoft hired = that subsidiary, Momentum Business Applications, to write new software, = and Momentum, in turn, hired PeopleSoft programmers at a markup. The = arrangement transformed the high cost of creating new programs into a = source of revenue for PeopleSoft.=20 Jan 22 2002 10:49 AM In Play PeopleSoft (PSFT) 34.32 -1.02 (-2.9%): = Accounting concerns again putting pressure on PSFT shares. The San Jose = Mercury News reports that an accounting maneuver by former PSFT head = allowed company to avoid crushing development costs. Six months before = stepping aside, PSFT co-founder David A. Duffield transferred $250 = million to a newly created subsidiary with just one employee and an = office down the road from PeopleSoft headquarters. Peter Knutson, an = associate professor emeritus of accounting at the University of = Pennsylvania's Wharton School, believes the arrangement misled = investors: 'It is within the boundaries of generally accepted accounting = principles, but it is really an intent to deceive.' =20 - ------=_NextPart_001_0084_01C1A334.8470DAE0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Hate to say it, but there's no substitution for a good read of the = 10Q's=20 and 10K's in combination with a good review of past news stories. Any = yellow=20 flags in the news stories should warrant a deeper dive into the = financials. Any=20 "odd" comments or financial "oddities" in the financial statements can = be noted=20 and investigated. (I always head straight for the management discussion=20 of results and the pending legal actions sections. Then = look for=20 odd accounting footnotes in the financials.) Can't catch them all, = but=20 without the due diligence, there's *no* chance of catching them. If a = stock has=20 too many yellow flags during DD, I just cross it off the list. There's = plenty of=20 fish in the sea. Despite all that, technical action usually speaks for = these=20 stocks long before the historical fundamentals "explain" the problems. = Investors=20 who don't combine technical/fundamental work miss the clues.
 
Katherine
----- Original Message -----
From:=20 Tom = Worley=20
Sent: Tuesday, January 22, 2002 = 10:52=20 AM
Subject: Re: [CANSLIM] PSFT: = More=20 accounting shenanigans?

so, how can small investors detect, much less = avoid,=20 these kinds of slick tricks?
 
Tom Worley
stkguru@netside.net
AIM:=20 TexWorley
----- Original Message -----
From:=20 Katherine=20 Malm
Sent: Tuesday, January 22, = 2002 11:45=20 AM
Subject: [CANSLIM] PSFT: More = accounting shenanigans?

Once more into the fire. Think this will become the "year = of the=20 accounting case study."
 
--Katherine
 
 This from Briefing.com
 
Archives In = Play=AE=20 all dates =
Date (ET) Archive Article
Jan 22 = 2002
11:06=20 AM		 In = Play PeopleSoft (PSFT) 33.45 = - -1.89=20 (-5.4%): -- Update -- This is not the first time that concerns = about=20 accounting at the Momentum unit have been brought to light. On = Jan 2,=20 Briefing.com reported a Lehman defense of the stk following a = 12/31=20 Bloomberg article indicating that PSFT might repurchase its = Momentum=20 Business Applications unit to avoid paying royalties.=20 Lehman predicted that PSFT was likely to = purchase=20 Momentum for about $90 mln within the next few qtrs. Firm did = not=20 think there were accounting irregularities and = viewed the=20 issue as likely overblown.
Jan 22 = 2002
10:53=20 AM		 In Play PeopleSoft (PSFT) 34.37 -0.97 (-2.7%):=20  --Update-- According to the San Jose Mercury article, = PeopleSoft=20 hired that subsidiary, Momentum Business Applications, to = write new=20 software, and Momentum, in turn, hired PeopleSoft programmers = at a=20 markup. The arrangement transformed the high cost of creating = new=20 programs into a source of revenue for = PeopleSoft.
Jan 22 = 2002
10:49=20 AM		 In = Play
PeopleSoft (PSFT) 34.32 -1.02 (-2.9%): Accounting = concerns again=20 putting pressure on PSFT shares. The San Jose Mercury News = reports=20 that an accounting maneuver by former PSFT head allowed = company to=20 avoid crushing development costs. Six months before stepping = aside,=20 PSFT co-founder David A. Duffield transferred $250 million to = a newly=20 created subsidiary with just one employee and an office down = the road=20 from PeopleSoft headquarters. Peter Knutson, an associate = professor=20 emeritus of accounting at the University of Pennsylvania's = Wharton=20 School, believes the arrangement misled investors: 'It is = within the=20 boundaries of generally accepted accounting principles, but it = is=20 really an intent to deceive.'
 
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