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Technology Stocks : IBM -- Ignore unavailable to you. Want to Upgrade?

To: Arrow Hd. who wrote (7479)	3/6/2002 2:18:39 PM
From: Jacques Newey	Read Replies (2) \| Respond to of 8218

Arrow, This stuff is months old but may shed light on some of your questions. I respect each one of these authors. FWIW “Buffett on Stock Market” (and pension fund return assumptions). “Heroic assumptions do wonders, however, for the bottom line. By embracing those expectation rates shown in the far right column, these companies (including IBM) report much higher earnings--much higher--than if they were using lower rates. And that's certainly not lost on the people who set the rates. The actuaries who have roles in this game know nothing special about future investment returns. What they do know, however, is that their clients desire rates that are high. And a happy client is a continuing client.” fortune.com From Forbes: James Grant “In 2000 a flat top line was made to yield 5% growth in earnings per share. By lowering the allowance for doubtful accounts (as a percentage of receivables) in a worldwide tech slump, getting its tax rate down and changing pension return assumptions, IBM created $858 million, or 47 cents per diluted share, in aftertax profits. That was 10.6% of the total. Shrinking the share base also helped EPS. It is true, of course, that buying in shares can make remaining shareholders better off (if the shares are purchased cheaply enough), but this is not the same thing as internal growth.” forbes.com and… “The biggest item on Rexroad's list of artificial gains is the accounting for retirement benefits. IBM has been getting a nice kick to reported earnings from the robust state of its pension plans. Pension-related effects boosted the aftertax bottom line by $820 million last year, a 63% improvement in this source of profits from the year before, Rexroad says.” forbes.com