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

To: TimbaBear who wrote (25064)	10/20/2006 12:44:06 AM
From: Carl Worth	Read Replies (1) \| Respond to of 78717

to the first line, the SEC is telling companies how to account for options, it is not regulating how much of their profits they can pay to management and/or employees you claim to want a fair and open marketplace, yet you want all kinds of regulations to supposedly protect every shareholder from themselves, and tell companies how much they can pay their management and employees...the companies who don't act responsibly toward their shareholders will not survive in a fair and open marketplace, where they compete with thousands of other companies for shareholder dollars it isn't government's job to protect the stupid people from their stupidity, or the lazy people from their laziness...this is akin to people suing the brokerage analysts because they lost money in the dotcom bust...people are responsible for their own investments, if they can't figure out individual stocks, they can buy mutual funds...if they can't figure those out, hopefully they can find a competent financial planner...the last thing we need in this country is more and more laws to burden businesses...why don't we just reinstitute prohibition because some people are too stupid to drink responsibly? oh yeah, that didn't work either i think it comes down to a simple premise: you see corporations as evil conspirators who will take any advantage they can get, at anyone else's expense, that people need to be protected from...there are clearly miscreants out there, but the problems aren't widespread, and those who would choose to abuse the trust of their shareholders are going to do it no matter how many laws you enact...as such, similar to the new options rules and things such as reg FD and sarbox, passing even more laws won't stop the few bad apples, it will only cause further expense and annoyance to everyone else as for the options, there is zero cost when they are exercised, except the earnings dilution...if the company decides to buy back shares to counteract the dilution, then there is cost in terms of a lower cash balance earning interest, or a higher debt balance costing them interest, and either of these is reflected in the earnings statement...of course they have value to the recipient, but again, that value is in the future appreciation of the company, and is offset by the future dilution of earnings it's true that a company could issue stock instead of options, but that means certain dilution, instead of dilution only in the case of stock appreciation, so that's either more costly to shareholders, if the stock price goes down, or equally costly, if the stock goes up...it's never a better solution in terms of how it affects the shareholders, it just perhaps makes them feel more "warm and fuzzy" in the meantime companies aren't taking your or anyone's money with a gun or knife...investors choose to buy shares, and except for the occasional outlaw company, all of these issues are fully disclosed in the filings of these companies...again, it's not the government's responsibility to protect people from their laziness in not fully investigating the companies they are investing in