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Investors are not fools; anyone reading these statements and reports is smart enough to understand the difference between GAAP and non-GAAP. Investors should ma
by nickff 10y ago
Investors are not fools; anyone reading these statements and reports is smart enough to understand the difference between GAAP and non-GAAP. Investors should make up their own minds as to which metrics are useful, just as you have made up yours that reporting the non-GAAP numbers is intrinsically suspect.
- tim333 10y agoAlso the non-GAAP numbers can give a more accurate impression of how the company is doing if done sensibly.
- refurb 10y agoAs a whole? Non-GAAP numbers are suspect enough for the SEC to create regulations around. Not every company abuses them, but enough do.[1] [1]https://www.troutmansanders.com/using-non-gaap-measures--observations-after-ten-years-of-sec-regulation-08-19-2013/ https://www.troutmansanders.com/using-non-gaap-measures--obs...
- tim333 10y agoSee the latest Berkshire letter for some examples http://berkshirehathaway.com/letters/2016ltr.pdf http://berkshirehathaway.com/letters/2016ltr.pdf
- idiot_stick 10y ago>Investors are not fools I hope you're kidding, because the counter examples to this are endless.
- azernik 10y agoTo be more specific - investors often do not do their own homework, and assume that some other hardworking soul has. See e.g. Theranos for a glaring example of this.
- doingmyting 10y agoI agree with the statement but not the example. Theranos actively deceived its investors and lied about it's business. This is wholly different than a company that is obviously not doing well but you didn't bother to vet.
- jolux 10y agoClassic bystander effect, really.