Skip to content
Andrew Tobias
Andrew Tobias

Money and Other Subjects

  • Home
  • Books
  • Videos
  • Bio
  • Archives
  • Links
  • Me-Mail
Andrew Tobias
Andrew Tobias

Money and Other Subjects

Amazon; Cow Accounting

January 24, 2002February 21, 2017

Lynn Smith: ‘I read yesterday that Amazon.com had earnings per share of $.01 last quarter. Their first ever in the black. The article also contained a bunch of gibberish about ‘pro forma’ profit. Any comment?’

☞ Yes: Good for them! I’ve been rooting for Amazon from Day One (although I am also rooting for Barnes & Noble, whose web site lately, and anecdotally, seems to me to have been more on the ball). Amazon deserves tremendous credit for innovation and enthusiasm and, especially, for trying to delight its customer. Amazon stock was absurdly overpriced not long ago and I enjoyed making fun of it. It may still be overpriced, but at least it’s got a shot at someday justifying your owning it here. (I don’t.) A year or two ago, it was just complete loony tunes.

Robert Doucette: ‘In case you were wondering how Enron came into so much trouble, here is an explanation reputedly given by a Colorado Aggie Professor to explain it in terms his students could understand:

Capitalism
You have two cows. You sell one and buy a bull.
Your herd multiplies, and the economy grows.
You sell them and retire on the income.

Enron Capitalism
You have two cows. You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows. The milk rights of the six cows are transferred via an intermediary to a Cayman Island company secretly owned by your CFO who sells the rights to all seven cows back to your listed company. The annual report says the company owns eight cows, with an option on six more. Now do you see why a company with $62 billion in assets is declaring bankruptcy?

Dana D. Dlott: ‘The guys from Enron are not nice. They are simply Familiar. Unlike black inner-city youths who rob convenience stores who seem scary, the Enron guys are the people you went to school with. If a thousand inner-city black youths robbed a thousand convenience stores every day for ten years, they still would not have stolen as much as the Enron executives.’

Post navigation

← Could Ken Lay Afford an Italian Mortgage?
Spaceship Earth →

Quote of the Day

"The point to remember is that what the government gives, it must first take away."

John S. Coleman, address to the Detroit Chamber of Commerce

Subscribe

 Advice

The Only Investment Guide You'll Ever Need

"So full of tips and angles that only a booby or a billionaire could not benefit." -- The New York Times

Help

MYM Emergency?

Too Much Junk?

Tax Questions?

Ask Less

Recent Posts

  • "PAPERS PLEASE" -- Trump's Very Own Gigantic Police Force

    July 9, 2025
  • 5 Links And A Joke Walk Into A Bar

    July 8, 2025
  • There WAS No Cherry Tree

    July 7, 2025
  • "The Most Popular Bill Ever Signed In The History Of Our Country"

    July 6, 2025
  • Unbelievably Bad -- Literally

    July 4, 2025
  • Repeal The Steal

    July 2, 2025
  • Our Record-High Stock Market

    June 30, 2025
  • Stuffing The Goose

    June 30, 2025
  • Yes! (Plus A Bonus)

    June 29, 2025
  • How Does THAT Make You Feel . . .

    June 27, 2025
Andrew Tobias Books
  • Facebook
  • Twitter
©2025 Andrew Tobias - All Rights Reserved | Website: Whirled Pixels | Author Photo: Tony Adams