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Strategies & Market Trends : BFT: Will the tulip craze ever break down?
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To: Pancho Villa who wrote (625)11/28/1998 10:48:00 AM
From: Pancho Villa  Read Replies (1) of 650
 
Our friend at BFT also do this nonsense:

interactive.wsj.com

"For several reasons, including ease of calculation, investment bankers and management teams settled on, and promoted, one measure of financial leverage as better than all the rest for REITs: debt as a percentage of total market capitalization. It is calculated by dividing a company's total debt outstanding by its total equity market capitalization, including any operating partnership units. But it didn't take long for analysts and investors to point out numerous flaws in the measure. Among them: The measure suggests that a REIT's borrowing capacity, as well as its ability to service its debt, is directly tied to its stock price rather than to the value of its assets or cash flow available to service its debt. More to the point, a chief executive might be encouraged to add leverage as his stock price soared because the greater debt could still remain within the percentage of market cap set forth in the prospectus for his REIT's initial public offering."

did any one hear the mention in WSW? BFT is a supposed to be a buy due to the high short interest! When people look for this type of reasons to buy you know something is very wrong.
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