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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Jacques Newey who wrote (166757)	6/21/2002 1:17:37 PM
From: Amy J	Read Replies (1) \| Respond to of 186894

Jacques, Buffett understand options probably about as well as he understands high-tech. The approx $400M in cash bonus and salary that was essentially taken by certain Enron executives is a case of fraud. Regards, Amy J

To: Jacques Newey who wrote (166757)	6/21/2002 3:31:27 PM
From: BelowTheCrowd	Read Replies (1) \| Respond to of 186894

There are a few other things that Buffett understands about options, that I think most on this thread don't. He highlighted these in his CNBC interview last week: * Options, more often than not, reward you for being early, not necessarily for being great. As he pointed out, a person who joined Microsoft early on and got a few options is now a multimillionaire, even if all that person ever did was the minimum necessary to avoid being fired. In the meantime, a person who joined five years ago and did amazing work that made a huge difference has seen little or no appreciation. * Options also are HIGHLY dependent on external factors (most specifically, the state of the stock market). As such they represent an incentive that may have nothing to do with the company's real performance. He will correctly point out that stock performance and company performance often diverge, and often do so for extended periods of time. Many people made millions on dotcom stock options, even though their companies never produced a thing or made a penny. And anybody who has had stock options through the past few years has seen nothing but a decline in value, even at companies that are growing. In a market like the 70s, when the economy and many companies grew but the stock market didn't move, options would be a HORRIBLE incentive, because they would mostly expire worthless. Unfortunately, many people who state that options are essential motivation have never considered the possibility of a flat or long-term bear market, one in which even growing companies can see their stock go nowhere. Buffett has lived through those times. Most of the tech business as we know it didn't even exist then. Personally, I don't think we're going to have to do much about options. The market is already doing it. A year or two of moderate-to-flat (let alone down) performance will cause employees to demand other compensation schemes, because they'll be seeing nothing from their options and increasingly will be seeing options getting close to expiration still worthless. mg

To: Jacques Newey who wrote (166757)	6/21/2002 6:10:18 PM
From: Amy J	Read Replies (2) \| Respond to of 186894

Jacques, RE: "From Buffett's 2001 Chairman's Letter to Shareholder's: A gorgeous woman slinks up to a CEO at a party and through moist lips purrs, "I’ll do anything - anything - you want. Just tell me what you would like." ------------- Buffett really has a serious problem if he wrote this. This has tones of implied sexism that isn't appropriate for a shareholders report. The day Intel writes something as disgusting as this in a shareholders report (which they have the intelligence to never do), would be the day I sell all my shares. [edit correction: actually, I wouldn't sell my shares, because it would be the day the shareholders would move to get the writer of such a report fired. Fortunately, Intel has world-class annual reports and Intel's last report was the best report I've ever seen in the entire industry. Maybe Buffett should study high-tech to learn something.] For one, his "suggestive" comment appears to imply a) CEOs are males, b) that gorgeous women are sleazy. He needs to find a different writer for his shareholder reports than himself, rather than perpetuating harmful stereotypes. Amy J