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

To: Knighty Tin who wrote (70982)	11/26/1999 8:27:00 AM
From: re3	Read Replies (1) \| Respond to of 132070

words from WEB re playing musical chairs... ...Warren Buffett himself has held forth on this issue, using the following words: If you and I were trading pieces of our business in this room, we could escape transactional costs because there would be no brokers around to take a bite out of every trade we made. But in the real world investors have a habit of wanting to change chairs, or of at least getting advice as to whether they should, and that costs money--big money. The expenses they bear--I call them frictional costs--are for a wide range of items. There's the market maker's spread, and commissions, and sales loads, and 12b-1 fees, and management fees, and custodial fees, and wrap fees, and even subscriptions to financial publications. And don't brush these expenses off as irrelevancies. If you were evaluating a piece of investment real estate, would you not deduct management costs in figuring your return? Yes, of course--and in exactly the same way, stock market investors who are figuring their returns must face up to the frictional costs they bear. And what do they come to? My estimate is that investors in American stocks pay out well over $100 billion a year--say, $130 billion--to move around on those chairs or to buy advice as to whether they should! Perhaps $100 billion of that relates to the FORTUNE 500. In other words, investors are dissipating almost a third of everything that the FORTUNE 500 is earning for them--that $334 billion in 1998--by handing it over to various types of chair-changing and chair-advisory "helpers." And when that handoff is completed, the investors who own the 500 are reaping less than a $250 billion return on their $10 trillion investment. In my view, that's slim pickings.

To: Knighty Tin who wrote (70982)	11/27/1999 9:55:00 AM
From: Cynic 2005	Read Replies (2) \| Respond to of 132070

Saw your letter in Barron's this week. But these two are more interesting. ------------- To the Editor: How dare Alan Abelson castigate Mr. R. for lack of class! Rukeyser's pre-broadcast "Dear Gail" e-mail shows tremendous growth from his infamous on-air blindsiding of former chief elf Bob Nurock several years ago. With Nurock's departure, Wall Street Week's technical index morphed into its current state of stupidity. Gail is much better off serving her clients and not playing this silly game. As for the show itself, it is truly sad that a brilliant innovation in its day remains suspended in time, except for changes in furniture. I tune in these days only when there is a guest worth watching, as the rest of the program has degraded into a content-free exercise in ego gratification. HARVEY R. GREENBERG Westford, Massachusetts To the Editor: Eureka! In his characteristically misguided diatribe, Alan Abelson inadvertently supplies the answer to a mystery that has baffled savvy investors for decades: How can a financial columnist be so unfailingly wrong about the stock market for more than a generation? The answer, he now reveals, is that he is tied up at deadline time and unable to watch Wall Street Week, which has consistently and correctly guided the largest audience in the history of financial journalism throughout the greatest bull market since Moses left Mount Sinai while Abelson kept stubbornly, and irritably, pointing in the wrong direction. Clearly, it would be a public service if you find it impossible to change Abelson's hours, for us all to chip in and buy him a VCR, so he can record the program and begin to learn what's actually been going on in the world of finance all these years. I will be happy to kick things off with a $10 contribution, as a public service to any Barron's readers who might still be foolish enough to take this perennial Wrong Way Corrigan seriously. LOUIS RUKEYSER Owings Mills, Maryland

To: Knighty Tin who wrote (70982)	11/27/1999 1:00:00 PM
From: Logain Ablar	Read Replies (1) \| Respond to of 132070

Hi Mike: LGND has been showing some life lately. Tim

To: Knighty Tin who wrote (70982)	11/28/1999 11:51:00 AM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

To All, the funniest piece of news in my absence was the two part take on the IBM eps reporting scam-a-rama. First, analysts noticed that IBM was actually using capital gains to reduce SG&A. Then, IBM made the point that they've been using this trick every quarter since 1994. Wow, those "analysts" are a bunch of brainiacs. Fool me once, shame on you. Fool me 21 quarters in a row, what the hell did I pay tuition for? <g> Now, if the analysts are not smart enough to read the financial reports, you would have thought they might have taken heed the 821 times Fred Hickey has harped on the subject for the past 5 years. Or the 642 times Earlie has written about it. Or the 738 times the scam has been noted in The Daily Rap. Or even my handful of letters to Barron's. And, folks, I phrased it in little words so that analysts could read without straining their lips. <g> Now, let's see how long it takes Wall Street to catch on to the other couple of dozen flim flams Lou has pulled to make IBM look like something other than a mature co. with little growth potential.