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Strategies & Market Trends : The New Economy and its Winners

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To: Logain Ablar who wrote (16749)	4/25/2003 1:30:43 PM
From: Lizzie Tudor	Read Replies (2) of 57684

don't you guys think there was more to the nikeii's collapse than "valuations falling into line"? My feeling is we won't have a nikeii type situation in the US until some other power emerges to overtake us economically. Thats really what happened to the nikeii (US regaining global economic lead in a "hearts and minds" sense). I think the real issue with US stocks is the options expensing/corporate integrity issue. I see apple shareholders voted for expensing options at Apple. I think we all know that options aren't actual expenses in the cash flow sense, but shareholders are demanding reform on this executive overcompensation issue and imo until this gets resolved there will be stagnation in the mkts, HOWEVER, when it is resolved, (and I think it could be soon)- and if that resolution is options expensing, we will have a bull mkt. The only issue that will remain then is whether tech companies can do well without options. Imo some can, some can't. Amazon started expensing options and shareholders are ignoring those "expenses" imo. Maybe that will happen everywhere. What shareholders really wanted was for the gravy train to stop, and expensing does indeed do that. I am against options expensing except for one situation that even I have to agree with the expensing-hawks on. This is the case where companies like Computer Associates are using their companies as a personal piggy bank and taking huge amts of wealth out of the company. You could say shareholders can vote with their feet, and they have. The problem is that index funds have to hold CA even though the company is pretty much a sham. I say those guys at CA should have to expense and then their results could be so bad they will get dropped from most indexes. Expensing is the only way to stop this, imo. The problem is, the flipside of expensing means great companies like Cisco may possibly die, imo. L

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