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Technology Stocks : Lucent Technologies (LU)
LU 2.515-0.2%11:03 AM EST

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To: Diamond Jim who wrote (10380)10/20/1999 11:56:00 AM
From: John Malloy  Read Replies (1) of 21876
 
<<This is a good quote from that article - "Buy companies in today's market which have next to no debt and you'll be
OK."">>

But your return as an investor is directly proportional to the firm's return on equity. When a firm takes on debt, it leverages its return on equity above its return on total capital. Your return is leveraged too, and by the same proportion. It is better to invest in firms that carry a reasonable amount of debt.

John Malloy
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