Rosy Scenario Enters the Private Sector


As the stock market climbs ever higher, professional investors are warning that companies are presenting misleading versions of their results that ignore a wide variety of normal costs of running a business to make it seem like they’re doing better than they really are.

What’s worse, the financial analysts who are supposed to fight corporate spin are often playing along. Instead of challenging the companies, they’re largely passing along the rosy numbers in reports recommending stocks to investors.

“Companies are tilting the results,” says fund manager Tom Brown of Second Curve Capital, “and the analysts are buying it.”


You have to wonder about that first line, what with the Dow being down slightly for the year. So that has to make you wonder how much lower stocks would be if companies weren’t doing their best impression of the BLS by ginning up their numbers.

But, hey, if Washington can get away with it, then why not the private sector, too?


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