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Technology Stocks : IBM
IBM 307.940.0%Dec 5 9:30 AM EST

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To: Mark Brophy who wrote (2977)5/2/1998 7:17:00 PM
From: Bill Martin  Read Replies (1) of 8218
 
Re: I'm amazed that they've been able to report earnings every quarter without increasing shareholder's equity.

This isn't really all that amazing -- it's simple mathematics. Do a little calculus on the problem and you'll see that if a company buys back stock its stockholders equity goes down and its ROE (Return on Equity -- one measure of quality of management) goes up. IBM's ROE is currently above 30 which isn't shabby in any league -- MSFT is currently about 33 I believe.

Bill
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