The Gap Between Operating And GAAP Earnings
Really good “Ahead of the Tape” WSJ column by Mark Gongloff from Friday: “Investors, It Pays to Mind the GAAP Gaps”. He discusses the widening gap between operating earnings and GAAP earnings over the last 15 years.
From the chart, it looks like operating earnings for the S&P 500 over the last 4 quarters is close to $40. With the S&P closing today at 1065, that’s a trailing P/E greater than 21.