Jump to content

What Would Charlie Do?


Parsad
 Share

Recommended Posts

I suspect he would slap these accountants in the back of the head for being so stupid!  Altman Z-score! 

 

Ignore the fact that it's Overstock.com and they are sourcing Sam Antar and Gary Weiss, but from the numbers they present, the Z-score hasn't successfully predicted Overstock's demise since 2006!  ;D 

 

I think Z-score and beta must drive Buffett and Munger crazy.  Cheers!

 

http://blogs.smeal.psu.edu/grumpyoldaccountants/archives/569#comment-11141

Link to comment
Share on other sites

Parsad,

 

I think you are being a trifle too harsh, (on the model not the professors!).  Z-score equation is simply a model, the question is how accurately does it predict distress, which the good professors don't profess to explain.  They are implying infallibility, which in the world of finance ain't good.

 

 

Link to comment
Share on other sites

Parsad,

 

I think you are being a trifle to harsh, (on the model not the professors!).  Z-score equation is simply a model, the question is how accurately does it predict distress, which the good professors don't profess to explain.  They are implying infallibility, which in the world of finance ain't good.

 

Hi net-net,

 

I was trying to point out the way they are using the model...not so much the model itself.  Like the way beta is used these days, Z-score in itself is not a good predictor of anything.  Most models utilize past data and cannot explain a transitioning financial statement.  Finance is never static.  Cheers!

Link to comment
Share on other sites

Since the profs imply that bankruptcy is around the corner, I was hoping for some deeper analysis. I think this is one more example of lazy journalism that permeates the writing community (bloggers in particular) - lots of icing, very little cake. I tried to post some constructive feedback on the blog but was denied - so much for journalistic ethics.

Link to comment
Share on other sites

Since the profs imply that bankruptcy is around the corner, I was hoping for some deeper analysis. I think this is one more example of lazy journalism that permeates the writing community (bloggers in particular) - lots of icing, very little cake. I tried to post some constructive feedback on the blog but was denied - so much for journalistic ethics.

 

Yeah, they didn't post my comments either!  Very objective aren't they.  Cheers!

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...