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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: benwood who wrote (63174)	6/24/1999 1:45:00 PM
From: Mike M2	Read Replies (1) \| Respond to of 132070

Ben, thanks. Record high PEs on record low quality ( IMO) earnings - an ingredient fer tough love and economic violence. When I assert that the quality of earnings is low I refer to stock options accounting of course where the charge hits shareholder equity but not the income statement yet the company derives a tax benefit on the income statement to the extent that the employee pays taxes on the gain. HO HO HO In addition, there are recurring non recurring writeoffs with questionable expenses thrown in there to make future earnings look better. there is no productivity miracle -it's a mirage a rapid decline in corporate interest expense and lower tax rate and depreciation charges deserve much of the credit for the rapid earnings growth in the early to mid 90's. When valuing stocks one should consider the sustainability of the stream of earnings -many of the factors which have boosted earnings are of little help going forward. Abbey Joe's super tanker economy has steamed into a mine infested waters HO HO HO Mike