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To: LLCF who wrote (144516)	1/18/2002 1:03:57 AM
From: GraceZ	Respond to of 436258

Wasn't it the W. Buffet article that was talking about he average return assumption going from like 6% years ago to 10-12% now??? One of the sexiest jobs around in the last five years has been that of a pension actuary. These guys brought money straight down to the bottom line with their return and life expectancy assumptions.

To: LLCF who wrote (144516)	1/18/2002 9:18:01 AM
From: reaper	Respond to of 436258

<<Wasn't it the W. Buffet article that was talking about he average return assumption going from like 6% years ago to 10-12% now???>> i don't think anybody is insane enough to be at 12% (Cisco would be, but they don't have a pension plan), but LOTS of companies are at 10%, including GM. I expect pension accounting to be the NEXT big accounting issue (after everybody gets sick of off-balance-sheet debt), probably coming to a head in 2H:02 or so especially if markets don't recover as people will start doing the math on the sort of cash outlays companies are going to have to make to shore up their pensions (most companies have not made an actual CASH contribution to their pension plans for years thanks to asset appreciation). I have actually moved my search for liquidity crisis shorts from companies with huge off-balance-sheet leverage (I think I have found most of them <g>) to those with likely upcoming pension problems. Like off-balance-sheet debt, all the pension information is right there in the footnotes to the financials; all you need to do is look (but as we know the morons at Janus and Putnam wouldn't recognize a footnote if they were slapped in the face with it, thus the shorting opps). I'm getting through about 2 S&P 500 10Ks a night, but the real fun will come in the disclosures for FY01, and those 10Ks will start coming in mid February. I will of course keep all appraised of what I find. And yes, it was Buffett who said in a recent article that companies were WAY out of line anticipating 10% average annual returns. I would also note that Byron Wien / Barton Biggs of Morgan Stanley, who are the only remotely credible market strategists left, in their "10 Surprises for 2002", thought that pensions would become a big issue. This GM thing is just the very tip of the iceberg. Cheers