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Politics : Ask Michael Burke

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To: Don Lloyd who wrote (76292)	2/20/2000 11:51:00 AM
From: Freedom Fighter	Read Replies (1) of 132070

Don, >>Much too obvious to be true, IMO, although my record of convincing people of this is one of almost uniform failure.<< Just for the record, I do not think your arguments about this are without merit. In fact, I think they are extremely well reasoned and probably correct. I still just find it necessary to try to estimate the impact that the substitution of options for cash is having on reported results. Here's an example. When Warren Buffett bought General Re he immediately substituted a cash compensation plan for the existing stock option plan. There was an amount of cash that the management of General Re deemed satisfactory in order to get them to give up the options. Despite all the complications of that measurement related to taxes, stock price movements, repurchases, etc... I do believe it is useful to calculate that theoretical value for valuation purposes. I do it both ways. You did not fail to educate me. Wayne

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