Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era -- Ignore unavailable to you. Want to Upgrade?

To: porcupine --''''> who wrote (236)	4/22/1998 9:50:00 AM
From: Reginald Middleton	Respond to of 1722

Let's look at this from the other side of the fence. MSFT sinks significant money into investments to hide cash from taxes in the form of R&D, Marketing, Acquisistions, etc. This serves to reduce net cash flow if the cash flows are not calculated from properly reconciled net income. MSFT's investments are also several times more profitable than IBM's. For instance, look at the investment in Win 95, Win NT, and Office development and marketing. Compare this to IBM's investment in Lotus Development and the consistent tax free dividends (share buybacks). Which has produced more value? The difference is significant. A major reason IBM purcahses so many shares is becasue they can not find any investments that can clear thier cost of capital requirement in order to create value. When in doubt, you can always make an investment at or near the cost of capital, the repurchasing of your equity and refinancing of your debt. The problem is thier is but so much capital to repurchase, and the environment is growing like a weed. This money should go into active investments like performed by MSFT and Dell Computer, two direct competitors of IBM in the same industries as IBM.

To: porcupine --''''> who wrote (236)	4/22/1998 10:18:00 PM
From: Freedom Fighter	Read Replies (2) \| Respond to of 1722

Stock Options Reynolds, I thought you would like the IBM part. The reason I posted the article was that I thought that the fact that stock options are being discussed in more mainstream publications was significant. Maybe there will be a change perception. There was another article on the subject in the NY Times today. The best one was in this week's Economist. Smithers & Co. did a study on the largest 100 companies in the U.S. Their conclusion....take a deep breath and sit down!!! Earnings were overstated by 42% in 1995 Earnings were overstated by 57% in 1996 Annual growth in income may be 2%-3% higher than the Fed thinks. I almost dropped. I tend to stay away from techs so my perception was that 10%-15% was about right for most companies (an average). I have seen examples in tech of 30% and a little more. Those numbers if accurate are more staggering than I imagined and have serious implications. I knew for a while it was a serious and growing issue, but holy shit! The report is not available to the public for free. I have already looked for it. It is for sale though. I put in a request for info. If it is reasonably priced, I will get it and report to the group. The study seems so far above even my thoughts, I want to see how they did it so I can come to my own conclusions about the methodology. I believe the company is generally bearish (on the U.S.) I am always suspicious of Investment House analysis due to the vested interest.

To: porcupine --''''> who wrote (236)	4/24/1998 7:56:00 PM
From: porcupine --''''>	Read Replies (1) \| Respond to of 1722

IBM will announce it is teaming with INTEL CORP. * In a new move aimed at jump-starting demand for its fledgling network computer business, IBM will announce it is teaming with INTEL CORP, the chip giant and personal computer standard-bearer, on future products in the area. Under the partnership, the companies will work to optimize Java OS for Business -- a network computer operating system that IBM is co-developing with SUN MICROSYSTEMS INC -- to run on Intel processors. International Business Machines Corp. also said it would build Intel processors into future versions of its Network Station line of network computers. (Reuters 01:59 AM ET 04/23/98) For the full text story, see infobeat.com