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Good Reading -- July 2016


Facts and Figures

  • Just 29 companies in the S&P 500 Index -- 5.7% of the total -- used exclusively GAAP accounting to report their 2015 results, a decline from 25% in 2006 and 42% in 1996. (Source: Audit Analytics/WSJ)

  • Under GAAP, a survey of 380 companies in the S&P 500 reported a decline in combined net income of 11% between 2014 and 2015. Those same companies proclaimed a combined 6.6% increase in adjusted earnings in their press releases. (Source: The Analyst's Accounting Observer/WSJ)

  • By this calculation, which stretches an already useless concept to the extreme by using the 100-day standard deviation of daily returns, the British pound experienced a greater than "12-sigma move" on June 24th following the release of the Brexit result. 12 sigmas is...a lot. (Source: BAML)

  • The largest U.S. age cohort in 2010 was 45 to 49 years old. In 2015, the largest cohort was 20 to 24 years old. (Source: U.S. Census Bureau, CalculatedRisk)

  • The most common ages by year:

  • 2010 -- 50, 49, 20, 19, 47

  • 2015 -- 25, 26, 24, 23, 27


Blackstone CEO Steve Schwarzman: "Let's just take energy first because it's in the news a lot. And talk about a crazy business where there's almost not one person who knows what they're doing, right? At $120, it was going to $140 a barrel. When you were at $80, it was going to stabilize at $60. And when you're in $60, you didn't quite know, but maybe it would be $50 to $70. And then when it went to $24, everybody is a bozo, right? And then it was going to stay there, sort of $25 to $35 or maybe $40 for the next year or two, and now it's $50." [Schwarzman] said that his favorite person to talk to when trying to make sense of the oil market was Exxon CEO REx Tillerson. "When the price's around $60, I asked Rex, 'What do you think?' He said, 'Well, it's going to be between $20 and $120, and we're set up for all of those environments. I think it'll go a little lower than higher, but what do I know? I've just been doing this my whole life.' And I thought, he's kidding, but he really wasn't." (Source)


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