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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (16110)	1/8/2003 6:29:24 PM
From: Bob Rudd	Read Replies (1) \| Respond to of 78747

Good article, Paul. Did you see the companion piece "Dividend All-Stars"...? They list 10 co's as 'Top Dividend-Paying Companies' 7 pay dividends less than 1% the other 3 are around 2%. Not exactly hot stuff, methinks. forbes.com

To: Paul Senior who wrote (16110)	1/8/2003 8:35:25 PM
From: Don Earl	Read Replies (1) \| Respond to of 78747

Paul, Interesting article. What it basically amounts to is companies would be reporting "dividends" which are their actual non GAAP earnings. It would be a bookkeeping nightmare for private investors and probably at least as bad for fund managers. The cost basis on every stock in every portfolio would have to be adjusted every quarter. It seems to me it would eliminate the motivation of most companies to continue paying cash dividends, when everyone else will be declaring cost basis dividends. I doubt it will cause the stock market to go up 20% once the average investor figures out how little money most of these companies are actually making on the Federal income tax level. The big plus IMO is it would go a long way toward eliminating GAAP reporting, which is something I'm in favor of, but it will cause one honey of a correction if it becomes law. The interesting part is it might actually have some potential to stimulate the economy since companies would be able to report "dividends" on retained earnings which could then be used for capital expenditures, plus there would be some incentive for companies to pay more taxes to add hype value to the stocks. As a "tax break" it doesn't amount to much, but as a major change in securities regulations, it's the most remarkably twisty thing I've ever seen pretending to be something else. My guess is it will get shot down in flames once a few lobbyists twig to what it is. Still, considering it's the only clever idea I've seen come out of the Bush administration, I kind of wonder if an under cover Democrat has managed to penetrate the inner circle. Too funny.