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Not to go off on a tangent, (but...) what do you make of Rappaport's criticism of EVA in his book _Creating Shareholder Value_?

One point he makes is that EVA relies on BV, and is therefore more historically-, as opposed to what I'll call entrepreneurially-, oriented. Is this important or does it boil down to a distinction without a difference, as Mr. Will would say?

Has G. B. Stewart ever offered a rebuttal? (If not, maybe he thinks it's much ado about nothing.)

ValueSnark -

Just saw your post from a month or so ago. When you question Mr. Rappaport about his criticism of EVA (which may be valid...I am curious to learn what they are), also ask why he wanted Jeff Skilling's endorsement for Expectations Investing. This book, which was co-authored with Michael Mauboussin, was published in 2001, just about the same time that the foul-mouthed jerk stepped down as Enron's CEO.

Expectations Investing has lots of useful information, but you have to wonder if Rappaport, Mauboussin and/or Harvard Business School Press were so giddy to get Skilling to bless the book that they took leave of their senses.

The Earnings Power Chart is not omniscient, but it did "see" Skilling's Enron was a low-quality growth stock years before the fit hit the shan.

For new visitors to this board, you can learn more about Enron here:


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