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No. of Recommendations: 1
Hi Hewitt, I enjoyed your book and I like you thesis about how earnings can be manipulated and why we need other ways to measure earnings to help us as investors. That being said, I am a member of Hidden Gems, and it seems to me that many of the companies that come up through that service do not/may not meet the criteria you are suggesting through your earnings power chart. This is just a gut instinct, for I haven't done a lot of detailed calculating on other than a few of their stocks that I actually own. I calculated a few PIV/ER's on some of my stocks and they didn't seem to have the safety factor that you may be looking for. What do you think of that and how do you look at those companies when they don't meet your guidelines(you mentioned recently that you missed on a few because of this - Blue Nile, FMD, etc.)? Is Hidden Gems something outside of the realm of the earnings power chart ? I know there are many different ways to be successful in picking stocks and investing, but these two ideas/methodologies don't seem to mesh very well, am I wrong about that ? If not, how do you think the two can be used together ? Thanks again for your help and insights. Bob
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