John Osterweis

Earnings are basically a negotiated number between management and the auditors,subject to considerable manipulation. Cash flow earnings before depreciation and amortization and after working-capital changes and either maintenance or total capital spending is much less subject to manipulation and just a much better measure of corporate profitability. At the same time, free cash flow is [...]

John Osterweis

We sometimes make a distinction here between blue-chip companies and less-thanblue chip companies. For example, our purchases of Google and Johnson & Johnson were probably a bit catalyst-light and had more to do with our view that negative perceptions of each would turn out not to be as negative or long-lasting as the market seemed [...]

John Osterweis

I'm particularly averse to the gobbledygook that passes as communication for some managers. Are they thinking clearly and logically about problems, or just repeating buzzwords?

John Osterweis

The market missing an opportunity often has more to do with the psychology around companies that run into trouble. “Everybody knows” the business is in trouble. Everybody knows” the management is incompetent. If we take a more nuanced view, see some positives among the negatives and have some insight into management’s capability of turning things [...]