Michel Pireu Columnist

In their book, The End of Accounting, Baruch Lev and Feng Gu bust the myth that earnings move markets by showing that the time-honoured ritual of predicting companies’ earnings and basing investment decisions on these predictions can be bested by simpler investment routines.

They also show that earnings estimates have lost much of their relevance, as investors justifiably ignore backward-looking accounting information.

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