EBITDA is not foolish
It is unwise for Jason Zweig to disparage additions and subtractions to EDITDA by describing them as "The Fanciful Alphabet Soup Companies Use to Fool You (WSJ, June 2, 2018)"." GAAP accounting is encountering serious deficiencies in its ability to differentiate repeatable costs from investments in the future which should be capitalized, i.e., charged to the balance sheet not to the income statement. The system stands in serious need of revision. Current accounting standards, for instance, reported only break-even profits for Salesforce.Com during a period when the company grew to $100 billion in market value. Likewise, Amazon grew to over $500 billion in market value during a period when the bean counters were saying the company was making no profits. Both of these companies were actually making substantial profits but were reinvesting them as soon as they were earned. So-called "value" investors have proudly if not arrogantly relied on traditional accounting standards to avoid Amazon since the turn of the century, saying the PE is too high. They have missed the best stock-market investment of the new millennium and have done a great disservice to the clients who have entrusted them with trillions of dollars.
It is time for FASB to re-vamp their modus operandi to capture the investment opportunities emerging at the dawn of the digital age.