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Technology Stocks : Oracle Corporation (ORCL) -- Ignore unavailable to you. Want to Upgrade?

To: MeDroogies who wrote (17234)	6/18/2002 1:16:32 PM
From: robert b furman	Read Replies (1) \| Respond to of 19080

Hi Medroogies, What is not yet being talked about ( except in the circles of upper mgt - decision makers) is how firms will spend retained earnings from this year to take advantage of the 30% tax credit that resulted fron 9/11. This little discussed tax loop accelerates depreciation in the first year and then slows it later.It really only has an impact if you make a large expenditure. If you do make a large expenditure that year - you get 30 % of it back. This law required an addended return for 01. Because 9/11 was so traumatic - few firms had large expenditures at the end of the year - it became effective retroactively to 9/11-no coincidence there.So it has had little effect . However when planning is allowed - it will be quite a boost.This boost can be maximized by accumulating earnings throughout all of 02 - spending right at the end of the year and then taking a 30 % depreciation at the final yearend tax bill. The degree to which this cashflow windfall is going to be taken advantage of will bring about bidding and quote activity somewhere in Q3 and Q4. The degree to which it works -may force those with definite plans to implement,to intiate purchase plans in Q3 to ensure delivery in Q4. It could get crowded in November if every one runs to the spending door at the same time. Just an observation of a tax benefit that make H2 far better than H1.Fortunately we are all but in H2.It has been a long and trying wait. FWIW Bob