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To: GST who wrote (140611)	3/15/2002 1:32:34 PM
From: H James Morris	Respond to of 164684

Gst, some investors believed in "unstoppable tornados" with "unlimited upside potential". Lesson: Manage investment dollars like they're your own. And don't buy into the easy come, easy go theory either. What did ARIBA used to trade at? 182?

To: GST who wrote (140611)	3/15/2002 1:45:36 PM
From: H James Morris	Read Replies (1) \| Respond to of 164684

March 15, 2002 Markets move between fear and greed, and also between skepticism and euphoria. Euphoria leads to giddily ascending prices, but also to massive abuses, as we saw in the mania of 1995 through early 2000. When the party is over and the punch bowl is dry, skepticism must take root, and the excesses must be extirpated. As polls reveal, the Enron/Global Crossing revelations have brought the necessary skepticism – a highly justifiable suspicion that earnings of companies big and small have been overstated for years. With price-earnings multiples still absurdly high, that is a sober realization indeed. However, euphoria has a way of vacuuming up truth, and that's one reason that a return to euphoria is not in the long-term interest of the economy. Not long ago, economist Donald H. Straszheim of Westwood's Straszheim Global Advisors predicted that the Enron heebie-jeebies would ease, and he was right, thanks to euphoria that dominated the market for several weeks. But now Straszheim warns, "The euphoria watch should be on. Euphoria breeds euphoria." We must not forget Enron, Global Crossing and other accounting shams. Wall Street analysts and investors overlooked burgeoning accounting deceit for more than a decade. It came back to bite us in the bear market. Various polls suggest that investors are sadder, wiser and more skeptical. New York's TowersGroup, a public relations firm, this month polled 363 investors with 401(k) accounts or other retirement plans. A stunning 43 percent of active individual investors have less confidence in the market post-Enron, according to the study. Only 23 percent believe strongly that the market reflects stocks' fair values. Almost 90 percent believe that Enron's executives, auditors, board or attorneys intentionally misled the public. Enron has become "the Watergate of business," says Alan Towers, president of the firm. Of those polled, 30 percent want to tighten financial reporting regulations, and 22 percent believe laws should be changed so that executives rigging the books can face criminal charges more easily. Indeed, the cover of the March 18 Fortune magazine says, "It's time to stop coddling white-collar crooks. Send them to jail." Amen. For too long, the guy who steals $30 from a gas station has gone to jail, while the executive who steals $100 million from shareholders only has had his reputation slightly sullied, if that. In February, a poll by Ipsos-Reid, commissioned by Business Week magazine, found that 60 percent of 619 investor-respondents said Enron was an indication that well-known corporations have been getting away with similarly dubious accounting practices. And 43 percent said Enron would seriously affect their investment decisions, while 41 percent said it would make them more cautious. Almost 90 percent wanted to see top corporate officials who are guilty of financial fraud liable for criminal prosecution. The TowersGroup and Business Week polls reached small investors. In early February, Wall Street Reporter magazine polled more than 25,000 investment industry professionals – analysts, fund managers, investment bankers, venture capitalists. A full 43 percent said they were "extremely concerned" about the potential for widespread financial reporting fraud, and 67 percent said Enron had prompted them to do more due diligence in their work. Almost three-fourths agreed that auditors should not provide nonaccounting services to auditing clients – a reform that looks like it will be enacted, unless euphoria sweeps skepticism under the rug. uniontrib.com