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Technology Stocks : Intel Corporation (INTC)
INTC 36.82+1.5%Dec 19 9:30 AM EST

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To: Stock Farmer who wrote (174574)5/14/2003 1:01:06 PM
From: Don Lloyd  Read Replies (1) of 186894
 
John,

It is possible to increase the rate at which shareholders divide the wealth faster than the wealth being divided is growing. In which case, those who hold the wealth in the first place are being made poorer.

That's the purpose of proper accounting.


The value of a company and the change in that value, and how that value is distributed amongst its shareholders are separate questions. I claim that the very word 'expense' must have an application to the value of the company proper, and its profitability, and it should be just as applicable to a private company as to a public one.

If a one man company in the tax free underground economy makes widgets and pays a secretary $25K per year, wouldn't he be able to increase his company's profits (revenues minus expenses) by $25K by marrying his secretary and eliminating the salary expense? Would this not be a real competitive advantage over another widget maker that still had a real salary to pay?

Regards, Don
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