Fundamental Analysis, I trust - part 2

I am a strong believer that buying shares of a company is akin to buying a PORTION of OWNERSHIP of that listed company and its underlying businesses and assets. And being a value investor, there shall only be 1 reason to do so, which is when the share PRICE of a company is selling BELOW its underlying VALUE. Different people will have different ways of valuing a company and as far as I know, there is no one sure-fire strategy to guarantee profit and obtain above average returns. And, that's the reason why I always agree on the saying that "investing is an ART", not science.

Let me start off my series on "Fundamental Analysis" ("FA") with its own shortcomings first (I usually prefer to taste the bitter parts before the sweet ones). One major argument against FA is that the analysis is based on numbers, prepared by accountants, whom are believed to be one of the most talented and sometimes, creative bunch of people in the world. Don't agree? allow me to share a story, which my accounting lecturer used to share with me:
There once was a business owner who was interviewing people for a division manager position. He decided to select the individual that could answer the question "how much is 2+2?"
The engineer pulled out his slide rule and shuffled it back and forth, and finally announced, "It lies between 3.98 and 4.02".
The mathematician said, "In two hours I can demonstrate it equals 4 with the following short proof."
The attorney stated, "In the case of Svenson vs. the State, 2+2 was declared to be 4."
The accountant looked at the business owner, then got out of his chair, went to see if anyone was listening at the door and pulled the drapes. Then he returned to the business owner, leaned across the desk and said in a low voice, "What would you like it to be?"

In other words, "numbers can lie"... This point of argument against FA certainly stands strong, or else, aren't the collapse of Enron, WorldCom and some other major corporate scandals living proofs? These companies have dozens if not hundreds of professionals monitoring their accounting reports closely, if FA works, many ignorant investors would not have been burnt so badly.. and not to mention the recent case of Transmile on our own Malaysian soil, which had caused its own shares to plummet more than 30% within a week. Reason? according to filings, auditors could not finalize accounts within stipulated period in absence of "relevant supporting documentation from management on certain transactions relating to trade receivables and related sales and additions to property, plant and equipment." and people starts to question the genuine of their past reports and etc.
Well, to defense against these, I would say...er... "u got me there, haha!!"
Seriously, cases like these do happen every now and then. We have to put in some extra efforts like closer monitoring; be extra careful while crunching the numbers; observe a few more years of its past records to look for consistence, and be very sceptical when there are extraordinarily good or bad years; and etc. The rest, we can only put our faith on the integrity of its management and auditors.
(By the way, if you want to see some good examples on number crunching, a good place will be at one of my favorite blogs, created by Moolah @ http://whereiszemoola.blogspot.com/. Do check it out!! He's good!!)

Ok. the score? 0 - 1 ..
to be continued..