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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: John F. Dowd who wrote (66663)	4/3/2002 1:35:37 PM
From: Baldur Fjvlnisson	Respond to of 74651

*Microsoft was able to completely escape federal income taxes due to a masterful and legal manipulation of the tax code which they are fighting desperately to not disclose to the public. This includes claiming a tax deduction of $22 billion for wages for this same two-year period. These wages were printed up as new stock certificates on a photo copy machine in the accounting office and passed out to employees who later cashed them in at their brokerage company. Even though Microsoft took a full tax deduction for these stock option wages that were never paid in cash, none of this wage expense is reflected on its earnings statement. This has grossly inflated Microsoft’s earnings and thereby created more demand for its stock. Companies that pay wages in cash have no chance of competing with Microsoft. Not only do they have less cash from paying real wages yet these cash wages are also charged against earnings and greatly reduce net income while at Microsoft net income is greatly inflated. The net impact is a lot more investors buying Microsoft stock than alternative investments. This has also severely corrupted the financial reporting system. Even non-public companies are greatly affected as they compete for financing to expand their businesses. Imagine how much easier it would be to get a loan if you could remove 80 percent of your expense of doing business from the income statement? This failure by Microsoft to show its entire wage expense has created what was originally defined as a “pyramid impact.” This circle of earnings manipulation will be documented. It also explains why at one point Microsoft represented 22 percent of the entire Nasdaq 100. At the same time many investors were buying QQQ Nasdaq 100 index shares based on the belief that they were getting a diversified Nasdaq portfolio. We will also see how this situation has ignited a merger wave in a variety of industries as traditional companies struggled to gain more interest in their stock values and technology companies struggled to avoid being collapsed into Microsoft's financial pyramid. Interestingly, Bill Gates does officially oppose a lower capital gains tax. Gates would be the biggest beneficiary of such a tax reduction. He should be commended for this stance because he is smart enough to know that such a reduction would not encourage long-term investment unless it were linked to holding the investment several years. His mentor, Warren Buffett, has coached him well here.* -Little Bill

To: John F. Dowd who wrote (66663)	4/3/2002 1:35:50 PM
From: Dave	Respond to of 74651

WSJ-Editorially is conservative. Oddly reporting-wise it seems to be twisting to the left. Hadn't noticed. Alternatively, maybe your own perspective has skewed so far to the right that even the Journal appears like radical leftism. Here's how to find out: Do you consider the Economist a bunch of whining liberals? After all, they did apologize once for having ever stated that Dubya was "elected" to the presidency. Dave