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

To: Knighty Tin who wrote (81707)	6/17/2000 10:57:00 AM
From: Freedom Fighter	Read Replies (1) \| Respond to of 132070

Mike, >>I think depreciation rates are faster for most of industry, but slower for scientifically based industries.<< For a relatively mature business the capital spending level should approximate the depreciation level. Perhaps it should be a little higher due to inflation and some effort at growth. I've always assumed that the best way to get at the business reality is to look at the actual free cash generation of the company and its growth. That removes a lot of those subjective accounting issues. But it's tough when companies are writing down assets, taking one time charges, or in a fast growth phase. The first two cover a lot of ground and the market seems to ignore it completely. In fact, if a company earns $3.00 per share over 3 years and then takes a $2.50 per share charge in year 4 the market loves it. That's nuts in my mind. You can't tell what they really earned or what they "will" really earn except that it's lower than it looks. Wayne