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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments -- Ignore unavailable to you. Want to Upgrade?

To: Pink Minion who wrote (17014)	9/5/2002 12:19:59 PM
From: Kevin Podsiadlik	Read Replies (1) \| Respond to of 18998

How exactly are you calculating book value? I'm not getting anything close to negative for a PG book value, much less minus 6 billion.

To: Pink Minion who wrote (17014)	9/5/2002 2:05:58 PM
From: S. maltophilia	Respond to of 18998

More widow & orphan gems: Avon -$40M (before backing out "other assets" General Mills -5B ($8.5B goodwill. Thats's one fat doughboy) Coca Cola $8B (divided by 2.4B shares) For comparison: WCOM ~$15B (per last 10K) Enron ~$8B (from a 10Q before the scandal broke +/- "other assets") IBM is also known for eating away at their equity, mosttly because of high priced stock buybacks.

To: Pink Minion who wrote (17014)	9/5/2002 9:12:38 PM
From: Mad2	Read Replies (1) \| Respond to of 18998

Without a doubt P&G looks pricy, going for a P/E of 28. Looks like mgmt is trying to support it to boot Short interest is building and from the looks of the chart, I'd say its set for a "adjustment". With their lofty after tax earnings of 10% and the fact that debit looks to have gone up by 5 bil and revenue a paltery couple hundred million per quarter something looks fishy. Also P&G took a big hit back in 2Q 2001 I recall, hitting their P&L with a bunch of stuff but lately they have "positive adjustments to income". Probably stacked the reserves last year so they could wipe clean and come out with a head start. Could have done the same thing with Clairol acquisition (overestimated this that and the other thing to give breathing room). Despit the above, P&G is seeing benifits of weaker dollar and IMHO thats what's been driving this stock and its earnings. core earnings growth ex acquisitions and ex currency adjustments are forcast in single digits. Pricey to say the least. BTW, value of brands and most IP has little to do with conventional book value. Money spent to build brands is generally expensed (except AOL, and some Anderson clients) which is good from cash flow view (unless your a looser company), whereas other businesses that make investments in machines, developing automobiles, tooling etc... have to spread the deductability over useful life. Accounting rules for book value treat phyical assets differently than than intangibles such as brands and research. mad2