Non-GAAP Earnings

     In the comparably normal times of yesterdays past, homeowners generally could expect the value of his/her/their house to appreciate over the period of time that he/she/they would be holding it.  Convert the casa to a rental property, however, and you found that Uncle Sam let you assume otherwise, and take a hefty depreciation charge against rental income based on a fictional view that the property would inexplicably now lose value over those years.  Furthermore, the accounting profession, through its Generally Accepted Accounting Principles (GAAP), sided with Sammy there.  Go public with this venture, and in their annual and quarterly reports, shareholders would receive the fictional account of what was not really going on here.

     Such nonsense occurs all over the business world's books and records, and not just with depreciation either - or because of Uncle Sammy.

     Our staff CPA started out as a Wall Street security analyst back in a prior century.  At that time, he and his compadres adjusted all kinds of stuff so that investors could see what they needed to by way of earnings, basically the number of greenback dollars really earned for shareholders and actually available for corporate purposes, including but not limited to stockholder dividends, capital projects, and reserves.  (In the above realty example, big bucks that had been classified as annual depreciation would usually get reduced to the relative pennies spent on asset maintenance.)

     CEOs and them always chafed at this process.  It made them look bad.  Like they were reporting fictional numbers, which they were, and using real secret numbers to run the business, which they also were.  So, wisely, CEOs and them decided to do something about their pathetic street cred.

     In today's times, corporate America has rightfully grabbed the bull by the horns and appropriately reports both of the numbers that have always been needed, GAAP earnings and non-GAAP earnings.  Our guy says this is the way it should be.  Accounting jocks with access to the real books and records are doing the due diligence rather than seat-of-the-pants-quant-flyboys like him.

     Some would have you think otherwise.  Surly reprobates would have you believe that GAAP produces some kind of holy word sanctified by an accounting religious order.  Valued subscribers, that is a crock.  Whatever the issues are with an earnings number, or all of the earnings numbers as some ill-mannered, bookkeeping-disadvantaged, agenda-proclaiming commentators incorrectly postulate, the sanctity of GAAP is not among them.

     Non-GAAP was, is, and probably will always be, the only way to give shareholders an important and inescapable part of everything they sorely need to know.

Impeach Obama

    The nation is at war with allied guerrilla military forces successfully operating on two fronts.  Both the Muslim peoples and the Black Race are deploying copycat tactics, massing non-combatants at strategic points on the battlefield to hide the assault teams launching their deadly attacks.  With the death of five officers and the wounding of six more by a sniper concealed among throngs of what enemy propaganda would have us believe was a "peaceful demonstration" in Dallas, the time has come to take appropriate action: 1) declare war and 2) call in the National Guard to protect civilian policemen from what clearly has, as stated by the latest insurrectionist, become unlawful assembly by enemies of the White Race specifically intended to establish the killing zone for their guerrillas whenever and wherever such uprisings are staged by enemy leaders, 3) identify and arrest the rebel leadership organizing this widespread unlawful assembly, 4) deploy armed military force to destroy sharia law as it pops up throughout the land, and 5) impeach Barack Hussein Obama II, whose wanton inaction has made this bloodthirsty outbreak happen.

     Enough is enough, America.  Take your country back.

The Enemy Strikes Again

     In the aftermath of the latest incursion against the White Race, in which, at latest count, 5 policemen were murdered by the insurrectionist(s) and 7 more wounded, propaganda organs serving the Central Party in Washington came out firing their own volleys, against truth, of course:  1) the NY Times passes the incident off as a mere "ambush" while the NY Post is censured mercilessly for appropriately citing "Civil War" in its headline, 2) a former congressman is accused of trying to do Obama harm for pointing out that the racist s%n%f#b!tch incredulously fueled this kind of violence with treasonous comments after that lowlife got gunned down attempting to grab an officer's weapon while fleeing a robbery the lout had just pulled off in Ferguson, Missouri, 3) the American Communist Party (still functioning under the pseudonym, "Democratic" Party all these months after central bankers seized the U.S. Treasury bond market, effectively nationalizing it to keep the wild-spending commies in power) accelerated calls for gun control to keep Whites from shooting back, and 4) nihilists throughout the pinko media pulled out a Huffington Post piece from last April telling us "Rival White Supremacist Groups Unite to Fight 'Race War'".

     Your MacDougal Post staff suggests that valued subscribers who haven't signed on yet use the Huffington list as a starting point in determining where you'd fit in best.  The White Supremacist Groups mentioned there are:

1. Loyal White Knights

2. National Socialist Movement

3. Aryan Nations

4. Texas Rebel Knights

5. America First Committee (Art Jones)

6. Racial Nationalist Party of America

7. SS Action Group

8. Phinias Priesthood

9. Aryan Strikeforce

10. NSDAP/AO

11. Pacific Coast Knights of the KKK

12. Racial Volunteer Force

13. Great Lakes Knights KKK

14. Werwolf 88

15. Aryan Terror Brigade

16. White Nationalist Front (Canada)

17. Authoritarian Party

18. White Wolves Invictus

19. United Society of Aryan Skinheads - USAS

20. Nordic Order Knights KKK

21. Traditionalist Workers Party

Stock Valuation under Commiecapitalism

     If, as we have repeatedly suggested in these pages, our formerly capitalist nation began to fall under communist control with the nationalization of the US Treasury bond market a while back, and, following Japan's lead, central bank ownership will spread to corporate bonds and ultimately stocks, then what does the future hold?  For starters, the day could come when one branch of the government or another would seize all financial assets they don't already own and replace our electronic interest and dividend payments with electronic welfare payments.  At that point all marketable securities would be valued at zero.

     Fortunately, rising stock prices seem to tell a different story.

     Commie China has been playing at faux capitalism for some time now, establishing zones of commerce, industry, and finance that pinko officials allege are owned by private interests even though the Communist Party has not ceded control over so much as one single thing ever over there, retaining the right to pull the Marxist rug out from under whatever it wants any time it so chooses via this weird kind of whatever-it-takes due process officials dream up after the fact to justify anything they need to get away with once all is said and done.  They even print stock certificates in Red China, just like we do, and say that private interests own them, again just like we do, and trade their faux stocks in faux stock markets, and everybody involved pretends the state doesn't own everything in commie China even though it really does and has a serious habit of shooting anybody who says otherwise about anything the party says.

     Could that, or something like it, be happening here?

     Sure.  Since we're really talking about the American Liberal now, a nut case if ever there was one,  anything's possible.  One look at the lying, fleecing scum they've got running for President until the bitch gets indicted should tell you that the do-and-say-anything-you-freaking-want part of commie governance is alive and well in our backyard too.

     Such being the case, how should the investor value his/her holdings in the event we're falling under some Chinese style faux capitalist commie wonton soup of a socioeconomic structure?

     Lets take a look at an old favorite of MacDougal's, this sweet electric utility outfit that's been an industry leader for as long as anyone alive can remember, a gilt-edge blue chipper if ever there was one.  It shall remain anonymous as there's no sense dragging a pristine name through Americal liberal commie wonton soup mud just because our valued subscribers need to know what they're worth under the spreading waves of Marxism sweeping across our beleaguered amber plains of Red America these days.

     Selling for 85, Anonymous Electric yields a tad under 4% with a price:earnings ratio (PE) rounded up to 19x on earnings per share (EPS) close to $4.50.  The stock has been making a bull run as investors are thinking 1) everything central bankers say is a crock and 2) Washington will never be paying the bond-holding public appropriate rates of interest on Treasury bonds ever again.  Utility stocks and them have turned into an oasis of much-needed dependable income for all kinds of wandering victims of unrestrained commie American Liberal spend-all-you-want politics.

     The balance sheet carries $38 billion in long term debt and $40 billion of shareholder equity, and management pays interest expense that's a bit under $2 billion before arriving at diluted net income a touch over $3 billion.  Interestingly, on the books the company gives bondholders close to 4% interest, about what the stock yields today.  What all this means is, under Zero Interest Rate Policy (ZIRP), if Anonymous eliminates interest expense by refinancing its long term debt at zero interest, EPS jumps 35% to something a bit over $6.00, after screwing with the after-tax effect.  Under Negative Interest Rate Policy (NIRP), should bondholders have to pay the company 4% a year to "invest" in their bonds, EPS climbs to almost $8.00, a pop just under 45%, after the aforementioned screwing with.

     If the PE holds at almost 19, Anonymous stock pops 45% too under NIRP.  Given the insane conditions we're left with, however, where you pay the company 4% to "invest" in their bonds or they pay you 4% if you hold their stock, one can conservatively assume that the PE on that stock would rise exponentially, at least doubling.  More realistically, the forecaster might call for a PE explosion of something like fourfold, maybe ten times or more, depending on how many abused bondholders are forced to jump into utility stocks and when.  Remember, reader, business risk disappears when bondholders give the company cash each year to hold company bonds.  If management screws up, THE CEO AND THEM GET FREE MONEY TO PAPER IT OVER WITH!  Look at that this way, Anonymous isn't just being subsidized through ZIRP/NIRP.  Being a great big blue chip industry leader, Anonymous is part and parcel of the Federal Government here, at least the company's entire financial end.  

     That puts our ZIRP forecast of Anonymous stock prices at something between 300 and 3,000 under conditions that call for bondholders to pay Anonymous 4% a year on Anonymous bonds.  That's up somewhat more than handsomely from a current price of 85, you will recall.

     Conversely, under the aforementioned case where American Liberal commies seize all financial assets and replace personal interest and dividend income with welfare checks, Anonymous stock would be valued at zero, along with everything else in the portfolio.

     Extrapolating this analysis, we feel it would be prudent for our valued subscribers to incorporate both forecasts into their long range financial planning, assuming that in the long run one's net worth will be valued within a range of 1) something like 10 to 15 times what it is today or 2) zero, depending on which way it goes with the fruitcakes in Red Washington.

     Hope that helps all of you out.  If the crystal ball clears up any, we'll be sure to let you know.

     Hey, chill.  We're doing the best we can here.