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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: larry who wrote (62397)	11/11/2002 4:51:14 PM
From: GVTucker	Read Replies (3) \| Respond to of 77400

larry, RE: Well, plain and simple, if all companies report earnings after stripping pension fund tricks and expensing options, the S&P is probably worth 300 points, a nice 65% haircut from current level. I don't believe that for a second. The institutional investors that for all practical purposes determine the pricing of stocks are already fully aware of the issues that you cite. Changing the way that profits are being calculated would have zero effect on a company's operations. The few investors that might be currently deceived wouldn't have much of an affect at all. Using your logic, any company that started to report options as expenses would see an immediate stock price drop due to the lower reported profits. We've had plenty of examples this year to refute that belief. Contrary to your theory, when a company starts to report options as an expense on the income statement, there has been a modest positive effect due to the market's perception that management has better credibility.