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Strategies & Market Trends : Steve's Channelling Thread -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (12385)	3/11/2001 10:47:46 PM
From: ajtj99	Respond to of 30051

Mish, I look at balance sheets all the time, and what assets are valued at on a balance sheet and what they bring in liquidation are two different things. Fixtures and equipment have amortization schedules, but when you buy a new store fixture, it depreciates 90% the minute you assemble it and put it out for use. That 90% depreciation is what it brings on liquidation, and that is how assets should really be valued. That's how banks look at fixtures in many instances. Office furniture, computers, business machines, phone systems, and other things are similar. They are pretty worthless if you have to turn them into cash quickly. When you have to liquidate, prices get slashed incrementally until they have stuff left with no buyers. The rest of the stuff is auctioned off or put out to bid. For example, your computer you are using to navigate the web probably depreciated 50% right after the company got your warranty card. GE is doing nothing different than any other secured creditor would do. They owe it to their shareholders to get as much out of that investment as possible. Sometimes that isn't pretty, but neither is a business failure. As for GE's share price, it will drop like the rest of the S&P in the coming months, so you'll have your revenge.