Why our clients trust economic earnings over reported earnings

27 Mar 2026 · 1 min

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The speaker wanted an index based on GAAP earnings but couldn't find one. He compares reported earnings to tax-based economic earnings and prefers the tax figure because it shows what companies actually pay the government, not just what they report to investors.

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What I really set out to find was an index that was based on GAAP earnings as opposed to just reported earnings. And it turns out that's not really a thing either, because at the time I didn't think anything like new constructs existed, right? This is before the ChatGPTs and stuff like that came out, and I didn't think anything was possible to really dive into each individual company and come up with the economic earnings the way you guys do. For the index. So I said, if I got to pick between these 2, if I got to pick between what you're— the company's reporting to me and what the company's reporting to the government and paying taxes on, I'm going to pick the number you're paying taxes on. That's just— if I have to pick between those 2, that one makes more sense to me.