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Technology Stocks : IBM -- Ignore unavailable to you. Want to Upgrade?

To: David Lee Smith who wrote (3003)	4/29/1998 2:53:00 PM
From: J R KARY	Respond to of 8218

Dave let me introduce you to FarFel , he simplifies TA Read FarFel's posts at YAHOO's IBM board as he has a way of cutting through confusing numbers to present investment advice: messages.yahoo.com@m2.yahoo.com Takes a while to understand but its unpretentious comedy . Regards, Jim K. PS: IBM will get you a non-Maalox 15% per year even if it doesn't hit the acquisition trail

To: David Lee Smith who wrote (3003)	4/29/1998 3:17:00 PM
From: DavesM	Respond to of 8218

Dave, What would your fair market value calculations be if IBM plowed their stock repurchases into dividends instead? As a stock holder of IBM, I prefer $3.5B in stock repurchases to an increase of my dividend of $3.75/share. As I recall stock performance wasn't so good when the dividends were around $4.50/share. BTW what does your HP calculator give as a fair market value for KO? Davesm

To: David Lee Smith who wrote (3003)	4/29/1998 5:09:00 PM
From: saju chacko	Respond to of 8218

consider this: there is no way one can avoid considering tax liabilities on dividend income each year. however, one can put off taxes on capital gains until he sells his stock. this is what i think and i don't have any tax education whatsoever. Saju

To: David Lee Smith who wrote (3003)	4/29/1998 10:56:00 PM
From: j g cordes	Respond to of 8218

David, that was a great post on IBM's stock price, which I too believe is over rated. The sales growth and margins don't warrant current prices let alone the wild projections I've read.. unless IBM's going to explode top line growth soon.. the price doesn't diminish it being a great company. Now for a favor.. would you run the same forward analysis on KO and GE and see where your fair value is. thanks. Jim

To: David Lee Smith who wrote (3003)	4/30/1998 2:37:00 AM
From: J R KARY	Respond to of 8218

Dave did your TA consider IBM's 35 year growth chart ? Can't understand your doom calculations when you look at the compounded growth of IBM in this chart : quote.yahoo.com Level out the temporary stock price insanity in the early '90s and you have the bluest of blue chip performance of compounded growth over 35 years . With IBM's e-commerce focus , buy it now , so you too can benefit for the next 35 non-maalox years . Jim K.

To: David Lee Smith who wrote (3003)	4/30/1998 7:05:00 AM
From: Robert Scott Diver	Read Replies (2) \| Respond to of 8218

Why would anyone believe stock values are directly related to dividends when many great technology companies pay no dividends at all? Do zero dividends mean the company is worthless? Scott

To: David Lee Smith who wrote (3003)	5/2/1998 7:27:00 PM
From: Bill Martin	Respond to of 8218

Re: If you believe that a stock is fundamentally worth the discounted present value of its future cash flows (dividends)... Dividends aren't equivalent to cash flow when a company is generating more cash than it takes to run the business David -- dividends are a subset of what you want to look at. I think you'd also have to include excess cash flow that IBM currently uses to buy in stock and to buy technology companies in your calculation to arrive at a "fair value". Think about how just applying your discounted dividends approach to Microsoft would result in a $0 fair value and you'll see it is not a valid approach in itself. Many, many technology companies pay no dividend -- IBM is probably more the exception than the rule. Bill