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

To: Freedom Fighter who wrote (67782)	9/16/1999 11:52:00 AM
From: Don Lloyd	Read Replies (1) \| Respond to of 132070

Wayne - (Off the top of my head I don't. I vaguely remember seeing 6% or so a few times but I can't recall who it was. Most likely it was a techie. Usually if the options grants are high, my analysis of the situation stops immediately because the earnings overstatement is too high to be acceptable the way I calculate the true expenses...) I wonder if 'stops immediately' is warranted. No matter if the earnings _are_ overstated, any business with a real competitive advantage is worthwhile at _some_ price. With both tax advantages and employee preferences for options, their use may very well be the proper business decision. I'm more leary of the 'buyback at specified time' plan, versus the 'buyback at advantageous price' approach. (... The long term terminal growth rate assumption is usually somewhere in the area of nominal GDP growth. If you knock 3%-5% off the terminal growth rate due to dilution it has an enormous impact on the resulting valuation.) True, but at the point where the terminal growth rate of nominal GDP growth comes into primary focus, MMF's make more sense. I'm not willing to pay much for what may or may not happen beyond five years out, which means that nominal GDP growth rates are just part of the noise, no matter how much they may contribute to a given model. Regards, Don