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Politics : Ask Michael Burke

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To: Knighty Tin who wrote (30058)	7/21/1998 11:37:00 AM
From: Joan Osland Graffius	Read Replies (2) of 132070

Michael, >>Today's move in IBM has me thinking that not all investors are brilliant. These folks believe as long as earnings are increasing things are ok. It is ok if IBM borrows capital to buy back stock as long as earnings increase. It is ok if revenues are not increasing. Net-Net positive, since the debt can be serviced and earnings continue to increase on paper, they will buy the stock. If Louis can continue this for the next X years things will be ok. I know that you understand this very well, but IMHO, as long as IBM can not continue to perform in this manner the stock will go up. The big question is what is going to stop Louis from delivering this paper performance? Joan

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