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Non-Tech : Home Depot (HD) -- Ignore unavailable to you. Want to Upgrade?

To: David Lawrence who wrote (976)	7/21/2002 11:42:06 PM
From: Ausdauer	Respond to of 1169

David, you seem to have an exhaustive knowledge of HD. Thanks for sharing some of that knowledge here. Aus

To: David Lawrence who wrote (976)	7/22/2002 9:55:47 PM
From: Don Earl	Read Replies (2) \| Respond to of 1169

<<<You seem to be trying to hold HD to a standard that is not a generally standard accounting principle.>>> You seem to be intentionally mischaracterizing my position. Off balance sheet debt is by no means common and is certainly not required by GAAP. It's a complicated structure, the sole purpose of which is con suckers into buying stock they might not buy if the debt was factored in. While I am well aware HD is hardly unique in using GAAP to doctor hell out of the numbers, while management pockets hundreds of millions of dollars, and do not approve of the practice, that isn't the point either. The point is those rules are in the process of being changed, and when the change is in effect, there won't be quite as many suckers lining up to purchase junk at inflated prices. That makes HD an ideal short pick in my book. As far as "singling out" HD as a hot prospect for a scandal stock, it is basically a matter of simple math that I don't have enough money in my brokerage account to purchase put options on all 500 large caps in the S&P index. No doubt there are plenty of other wonderful short picks in the index I could have "singled out" as well, and some of them I have, but that isn't the topic at hand. The topic isn't "everybody does it too". And the topic isn't "if you pay an auditor enough money, it's allowed by GAAP". I do think it's appropriate to discuss Home Depot's balance sheet on the Home Depot message board. I also believe it's appropriate to discuss the potential downside risk involved in a restated balance sheet due to the likelihood of changes in GAAP. In case you haven't noticed, large caps with cooked books have not been performing well. The market doesn't care if smoke and mirrors numbers cooked up in the heads of over paid bean counters are allowed by the rules. The market already understands most companies do it. The important thing is the market is also becoming aware there is no good reason to own stock until such time as the potential for abusive accounting has been cured.