Stock Profits: Getting to the Core—New Fundamentals for a New Age

any more than you can use technical trends to identify long-term

growth. The fundamental trends are more applicable for long-term

analysis. Your fundamental approach will be more accurate when it

is based on post-core earnings adjustment numbers rather than on

the unmodified GAAP numbers. To the extent that technical infor-

mation helps to explain recent trends, it can be useful as well—not

for current short-term market timing but as confirmation of what

you see in the adjusted fundamentals.

Endnotes

1. BusinessWeek online, 2002 earnings index.

2. Shirley Kemp, “Core Earnings: A Better Measure,” CFOweb,

July 13, 2002.

3. General Electric, investor information ...