,
4 tweets,
2 min read
Read on Twitter
1/ I tried to buy a hamburger yesterday with "earnings" and the counter clerk laughed at me. He would only take cash and said "Look earnings are only a clue about future cash flows, which you can actually spend." I knew he would say that but I did it anyway to justify this tweet.
2/ "Free cash flow is something that investors can spend. Investors can’t spend percentage margins. When forced to choose between optimizing the appearance of our GAAP accounting and maximizing the present value of future cash flows, we’ll take the cash flows.” Jeff Bezos
3/ If earnings are only a clue about future cash flow, why are people so obsessed about it? Because they are lazy and it is a shortcut companies must report. Mauboussin explains here: expectationsinvesting.com/pdf/earnings.p… 
4/ I've said often that books not hot off the press are under read and under re-read. Expectations Investing is just such a book. amazon.com/Expectations-I… Charlie Munger is wired to act like the optimal investor Mauboussin writes about. He thinks probabilistically about everything
