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To: Mark Adams who wrote (109207)	6/18/2001 3:54:13 PM
From: Don Lloyd	Read Replies (1) \| Respond to of 436258

Mark - Ok- instead of phrasing it in terms of comparing similar companies in the same subsector, let's say we want to gain a rough idea of the net present value of future earnings on a per share basis. If we have no idea of what the potential dilution is, how do we assess the potential of future earnings on a diluted basis?... I must be missing the significance of your question here. Dilution is essentially under the control of management with the approval of shareholders. Prediction of dilution is pretty much a matter of seeing what management says and what it does. Of all the variables that are involved with a company, dilution should be one of the ones with the least variance from predictions. ...I think I understand your point that accounting is a service to shareholders and management. Could it be extended to potential shareholders? After all, companies do spend money on IR, presumably to decrease their cost of capital. ... Off the top of my head, I suspect that the purpose of IR is to try to create and maintain a high level of liquidity to allow the disposal of insider shares with minimal price impact. Cost of capital will only come into play for secondary offerings. ...If we don't use the numbers provided by GAAP, then how do we measure relative performance, in your view?... Historical total return on invested capital? ...I think this is important to understand, as one of the issues (barriers?) with investing in foreign shares is the difference in accounting standards, or lack thereof. This may be true, but the reason that I would generally avoid foreign shares is excessive political risk and a lack of alignment of interest with the company, its executives and its home government. By US standards, all foreign stock markets must be treated as rigged (to a degree beyond that of US markets), IMO. Regards, Don