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November 13, 2003

Bowling for Shareholder Value

Robert Cringely: "Here's how earnings management works.  When Bob Scranton and I took a bowling class a million years ago at the College of Wooster, there were two girls in the class who didn't bowl nearly as well as we did, but they got a better grade at the end of the term.  They did this by deliberately doing poorly at first, then got slowly better through the term, while Bob and I just stupidly bowled our hearts out right from the start.  Our scores were always better, but their scores dramatically improved and ours didn't.  The teacher (imagine a bowling teacher -- now there's a concept) graded on improvement.  And so, historically, does Wall Street."

Posted at 20:42
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