by Larry Swing - September 25 2005

Education

A recent study by Todd Houge and Tim Loughran investigated the relationship between future stock price movements and current accruals and cash flows.  They found that investors and analysts made cognitive errors in underweighting these variables and overweighting earnings.

They show that portfolios that hold stocks with high accruals or with low cash flows perform very poorly.

Reference:

Todd Houge, Tim Loughran, "Cash Flow is King:  Cognitive Errors by Investors," September 22, 2000.

Todd Houge of the Henry B. Tippie College of Business, and Tim Loughran of the University of Notre Dame.

Analyses of ETFs

BBH:  Neutral.  (Biotechnology)

BDH:  Bullish.  (Broadband)

SwingTracker
MrSwings Real-Time Stock Charts RISK-FREE TRIAL featuring one-click access to Larry Swing's profit-generating indicators - Force Index, EquiVolume, True Strength Index

BHH:  Neutral.  (Business to Business)

EKH:  Neutral.  (European Stocks)

HHH:  Neutral.  (Internet)

IAH:  Neutral.  (Internet Architecture)

IIH:   Neutral.  (Internet Infrastructure)

OIH:  Neutral.  (Oil Services)

PPH:  Neutral.  (Pharmaceuticals)

RKH:  Neutral.  (Regional Banks)

RTH:  Neutral.  (Retail)

SMH:  Neutral.  (Semiconductors)

SWH:  Neutral.  (Software)

TTH:  Neutral.  (Telecommunications)

UTH:  Neutral.  (Utilities)

WMH:  Neutral.  (Wireless)