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To: Les H who wrote (185758)	8/5/2002 11:15:21 AM
From: Les H	Respond to of 436258

interesting snippet on options accounting Below is an extract from an article by Ken Long printed in the "One Minute Trader Daily Commentary" on 5 Aug 02. Here are some numbers to think about as you consider the distance the NASDAQ has fallen and then ponder the idea of "The Bottom". The 15 largest NASDAQ companies have a market cap of 750B. In 2001 they earned 25B "pro forma". They earned 13B "really". The total current value of their unexercised employee stock options is 12.5B. 750B in Price that Earns 500M = a PE ratio of about 1500. If you take out Comcast and Cisco (the 2 largest grantors of options), then it comes back to a more reasonable PE of 148 (reasonable!?). That's the reality of options. It gets worse. If you take out Microsoft, the top 14 out of 15 earned a negative 3.5B. So 14 of the best NASDAQ companies cannot collectively make a profit. With tighter definitions of earnings, and more scrutiny, is there reason for confidence that this dynamic is the scenario that produces a bottom any time soon? We'll see.