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To: FJB who wrote (1541)	3/20/1998 7:26:00 PM
From: abcde_98	Respond to of 2946

Economic Value Added (at SVG & on this board) I'll check on the bonus system. Just a follow-up to Dave's note on EVA as one it's prime goals is to have employees aligned with performance of their division/LOB, etc. Another way of looking at the same concept, but slightly more complex and more scientific, is to look at Market Value to Book Value ratio (P/E is related/contained within M/B ratio, so no need to look at it). How to get M/B up? On way is to reduce the required risk-adjusted return (RR). How to do that? Need to look at the risks involved in the firm. If can identify these, then figure ways to reduce them, the market will reward you. RR is essetially a measure of earnings volatility/stability. More stable the earnings, the more reward. ROE, another component of M/B, is a function of current earnings and need to get this up. Growth rate expected is the final component and is related to future earnings - need to get growth rate up. I imagine that a production facility has its error rate/wastage in production, etc. If this can be reduced, great. What other factors are there? We should ask der Terossian (sp) to hire us as consultants. Re: stress - yup, definitely know about that one. Don't want to be bearer of bad news or anything, but to be forewarned is to be forearmed as an ex-boss (military guy) used to say. Looked at the options just a little while ago and, at this time, for June it doesn't look too good for SVG above 25, but there's even more negative sentiment at $20. To break out of that scenario a shock is needed. Perhaps with earnings in April, but look at some companies that pre-announce, they take another hit on the actual annoucement day. Seems like double punishment and perhaps illogical, but the market ain't logical. Anyhow, the technicals cause me some concern, though there is support around the $20 to $20.75 level. Fundamentally, SVG makes sense, but it's going to be a while - like 1999 (the old contract win, prototpye development - lead time cycle - revenues come in late'98/or 1999). Along with semi-equipment sector which is out of favour, SVG doesn't rebound as strongly as the tech industry leaders, so there's a delay there. Patience not something I have a lot of for the market.