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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Knighty Tin who wrote (178153)7/8/2002 5:10:54 PM
From: reaper  Read Replies (4) of 436258
 
<<If you want to tout your stock, you keep your profit margins artificially high by not recognizing the co-pay. If you want to impress potential and current clients with how much you provide them and the liability you take off their books, you recognize the revenues and the liabilities. So, if Merck did the wrong thing, it was in providing too nice a picture to clients, not to investors. >>

If you want to tout your stock, impress investors with the large amount of revenue you are generating.

I don't think investors care about margins per se. I mean heck, Myth wants to buy Ford, AT&T and Rite Aid <g>

So I am guessing that you think all these bogus transactions by the energy traders are much ado about nothing as well?

I THINK you are right, that Merck would be suffering from a "scandal" under either scenario. That said, I have a very special place for companies that recognize revenue aggressively, and that place ain't my long portfolio. With 2000 stocks to choose from I'll just avoid this one for now; you are obviously MUCH more on top of the situation than me.

btw, that was an honest question about Merck's capex. what the heck do they spend $2.7 billion a year on, and why is it so much higher than what PFE spends?

Cheers
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