Graham and Doddsville -- Value Investing In The New Era Message Board

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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era

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To: porcupine --''''> who wrote (236)	4/22/1998 10:18:00 PM
From: Freedom Fighter	Read Replies (2) of 1722

Stock Options Reynolds, I thought you would like the IBM part. The reason I posted the article was that I thought that the fact that stock options are being discussed in more mainstream publications was significant. Maybe there will be a change perception. There was another article on the subject in the NY Times today. The best one was in this week's Economist. Smithers & Co. did a study on the largest 100 companies in the U.S. Their conclusion....take a deep breath and sit down!!! Earnings were overstated by 42% in 1995 Earnings were overstated by 57% in 1996 Annual growth in income may be 2%-3% higher than the Fed thinks. I almost dropped. I tend to stay away from techs so my perception was that 10%-15% was about right for most companies (an average). I have seen examples in tech of 30% and a little more. Those numbers if accurate are more staggering than I imagined and have serious implications. I knew for a while it was a serious and growing issue, but holy shit! The report is not available to the public for free. I have already looked for it. It is for sale though. I put in a request for info. If it is reasonably priced, I will get it and report to the group. The study seems so far above even my thoughts, I want to see how they did it so I can come to my own conclusions about the methodology. I believe the company is generally bearish (on the U.S.) I am always suspicious of Investment House analysis due to the vested interest.

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