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Hewitt Heiserman - Its Earnings That Count

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An innovative way to see through a companys published numbers to discover its true investment potential

This book gives you a blueprint for finding a great growth stock for the next decade without taking on a lot of risk in the process. Inspired by the writings of Benjamin Graham, Its Earnings That Count examines a firms earnings quality from the perspective of a defensive investor who wants to avoid committing ruinous mistakes as well as the enterprising investor who seeks Wall Streets next great opportunities. Unfortunately, as recent market history has shown, the traditional income statement is ill-suited to meeting the needs of these sometimes opposing viewpoints. As a result, investors can buy shares of a seemingly profitable company that, in fact, has poor earnings quality.

However, the authors trademarked Earnings Power Chart combines Grahams two personalities to reveal, in picture form, whether a company possesses authentic earnings power for long-term growth. Using the world-famous William Wrigley Jr. Company gum-maker as a case study, you will learn how to build these two alternate profit-and-loss statements to protect yourself. Since this book is written in plain English, you do not need to be an MBA or accountant to follow these step-by-step instructions.

Giving investors the tools they need to turn the tables in their favor, Its Earnings That Count covers:

  • The four limitations of the income statement found in every annual report, 10-K, and 10-Q
  • A quick-hitting, five minute test to sift out the obvious losers so you can save time and focus on analyzing potential winners
  • How to spot when a company is forging an Earnings Power Staircasethats your hallmark of a low-risk growth stock like Microsoft and Paychex
  • Why the charts of Lucent Technologies, WorldCom, Enron, and Tyco signaled trouble ahead of traditional income statement.
  • The 2 earnings power ratios you need before making your next investment
  • 12 ways to check whether managements interests are aligned with yours
  • A list of 15 items to check for to make sure the companies in your stock portfolio have a competitive advantage. (Hint: Great growth stocks always have competitive advantages.)
  • 16 kinds of companies to avoid
  • 20 indicators that it may be time to sell
  • Hewitt Heiserman: author's other books


    Who wrote Its Earnings That Count? Find out the surname, the name of the author of the book and a list of all author's works by series.

    Its Earnings That Count — read online for free the complete book (whole text) full work

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    Praise for Its Earnings That Count

    Well-written, intellectually sound, accessible to those who take the time to understand, and a poke in the eye to those who abused our capitalistic system and those (pros) who let them get away with it.

    John C. Bogle, founder and former CEO, The Vanguard Group

    In a single, easy to use index, Hewitt Heiserman captures the essence of growth and valuea most insightful approach to stock picking.

    Charles W. Mulford, co-author, The Financial Numbers Game, director, DuPree Financial Analysis Lab and professor of Accounting, Georgia Institute of Technology

    Clear and engaging, Heiserman shows how to easily evaluate a growth companys investment potential for both conservative and aggressive investors. The result? The cautiously greedy investor wins.

    Tom Jacobs, senior analyst, The Motley Fool

    Heisermans unique and thorough analysis not only provides methods for avoiding companies with suspect earnings, but also uncovering the true gems that are able to grow well into the future.

    Timothy M. Mulligan, J.D., LL.M., CPA., CEO, Forensic Advisors, Inc.

    Hewitt Heisermans innovative financial analysis technique goes a long way towards providing an investor with an extra edge in identifying the growth stocks of tomorrow without being unduly exposed to excessive investment risk today.

    Thornton L. Oglove, founder, Quality of Earnings Report

    This book lays the groundwork for becoming a successful long-term investor.

    Mark Sellers, equities strategist & portfolio manager, Morningstar, Inc.

    As an avid reader of investment books, I recommend this book wholeheartedly.

    Arne Alsin, Real Money.com and The Turnaround Fund

    In a clear, sound and practical way, Heiserman provides an investment road map that enhances the odds of your becoming a successful long-term investor.

    Robert L. Rodriguez, chief executive officer, First Pacific Advisors and two-time recipient of Morningstar Mutual Funds Manager of the Year

    You really do have to understand earnings if you are to succeed long term in investing.

    Jim Rogers, author, Adventure Capitalist and Investment Biker

    Heiserman shows investors how to uncover Wall Street earnings quackery and frauds. A must read.

    Kenneth Lee, author, Trouncing the Dow

    Like a professional athlete, Hewitt Heiserman Jr. brings intensity and brainpower to the world of investing. You need the graduate school that Its Earnings That Count can provide. Buy the book and do your homework.

    John D. Spooner, director-investments SmithBarney Citgroup and author of Confessions of a Stockbroker, Sex and Money, and Do You Want to Make Money or Would You Rather Fool Around?

    Great addition to the literature! Hewitt Heiserman has crafted an easy read, basic tutorial on avoiding the most common mistakes caused by accounting phony baloney-combined with some age old investment wisdom. Mandatory for the intermediate investor!

    Kenneth L. Fisher, CEO of Fisher Investments Inc. and Forbes Portfolio Strategy columnist

    Copyright 2004 Hewitt Heiserman Jr All rights reserved Except as permitted - photo 1

    Copyright 2004 Hewitt Heiserman Jr All rights reserved Except as permitted - photo 2

    Copyright 2004 Hewitt Heiserman Jr. All rights reserved. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher.

    ISBN: 978-0-07-154247-0
    MHID: 0-07-154247-7

    The material in this eBook also appears in the print version of this title: ISBN: 978-0-07-142323-6, MHID: 0-07-142323-0.

    All trademarks are trademarks of their respective owners. Rather than put a trademark symbol after every occurrence of a trademarked name, we use names in an editorial fashion only, and to the benefit of the trademark owner, with no intention of infringement of the trademark. Where such designations appear in this book, they have been printed with initial caps.

    McGraw-Hill eBooks are available at special quantity discounts to use as premiums and sales promotions, or for use in corporate training programs. To contact a representative please e-mail us at bulksales@mcgraw-hill.com.

    Information contained in this work has been obtained by The McGraw-Hill Companies, Inc. (McGraw-Hill) from sources believed to be reliable. However, neither McGraw-Hill nor its authors guarantee the accuracy or completeness of any information published herein and neither McGraw-Hill nor its authors shall be responsible for any errors, omissions, or damages arising out of use of this information. This work is published with the understanding that McGraw-Hill and its authors are supplying information but are not attempting to render engineering or other professional services. If such services are required, the assistance of an appropriate professional should be sought.

    TERMS OF USE

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    THE WORK IS PROVIDED AS IS. McGRAW-HILL AND ITS LICENSORS MAKE NO GUARANTEES OR WARRANTIES AS TO THE ACCURACY, ADEQUACY OR COMPLETENESS OF OR RESULTS TO BE OBTAINED FROM USING THE WORK, INCLUDING ANY INFORMATION THAT CAN BE ACCESSED THROUGH THE WORK VIA HYPERLINK OR OTHERWISE, AND EXPRESSLY DISCLAIM ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. McGraw-Hill and its licensors do not warrant or guarantee that the functions contained in the work will meet your requirements or that its operation will be uninterrupted or error free. Neither McGraw-Hill nor its licensors shall be liable to you or anyone else for any inaccuracy, error or omission, regardless of cause, in the work or for any damages resulting therefrom. McGraw-Hill has no responsibility for the content of any information accessed through the work. Under no circumstances shall McGraw-Hill and/or its licensors be liable for any indirect, incidental, special, punitive, consequential or similar damages that result from the use of or inability to use the work, even if any of them has been advised of the possibility of such damages. This limitation of liability shall apply to any claim or cause whatsoever whether such claim or cause arises in contract, tort or otherwise.

    To Dad
    A kind and generous man.

    CONTENTS
    FOREWORD
    A HISTORIC BUBBLE INFLATES

    It is only a matter of time until the Great Stock Market Bubble of 19982000 takes its proper place, at least metaphorically, in a new edition of Extraordinary Popular Delusions and the Madness of Crowds, the classic 1841 compilation of market manias by Charles Mackay. But we already know many of its causes.

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