Volume 10, No. 4


Reading The 2000 Annual Reports: A User's Guide:  What a difference a year makes. This time last year, earnings were ridiculed as old-fashioned ways of measuring performance of geezer industrial companies, while "metrics mania" stoked investor appetite for unseasoned firms with business plans that bordered on science fiction. Dot-com billionaires flourished barely after their voices had changed. Just as nature abhors a vacuum, the stock market abhors non-performance. It may tolerate it for a while, but when the speculative issues failed to deliver credible results, the market's displeasure was registered - and it continues today. In the stock market, the earnings-generating old dogs are having their day again (off and on). Maybe earnings aren't revered quite yet - but they aren't dismissed as airily as they were a year ago. To a degree we'll never be able to precisely measure, the metrics mania contributed to the bubble's inflation - and contributed to a deep-abiding ignorance of fundamentals. Those fundamentals can be re-discovered, in spades, in the annual report. It's the time of year to get reacquainted with them - so look at the annual report as a ticket to inside the theater of the firm. And consider this report to be your playbill.

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