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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Chuzzlewit who wrote (42718)	5/17/1998 4:17:00 PM
From: Lucretius	Read Replies (5) \| Respond to of 176387

No problem. Keep in mind, inflation is mistated also (remember all those reports citing no increase in wages, so everyone presumes that productivity must be improving.... OOOps, everyone seems to have forgotten option based compensation. I highly recommend you read that article. If nothing else, buy the magazine. I headed back to hopefully see the Bulls get DESTROYED!!!!! :) -Lucretius

To: Chuzzlewit who wrote (42718)	5/17/1998 4:20:00 PM
From: Lee	Read Replies (1) \| Respond to of 176387

Hi Chuzz,..Re:<< I especially don't like options-based compensation when there is no requirement for the recipient to hold the stock for a specified period of time.>> You are in good company. Warren also strongly disagrees with current standard accounting practices of not counting options as expense per the statement from the 1997 Annual Shareholders Report. Indeed, their reported costs (but not their true ones) will rise after they are bought by Berkshire if the acquiree has been granting options as part of its compensation packages. In these cases, "earnings" of the acquiree have been overstated because they have followed the standard -- but, in our view, dead wrong -- accounting practice of ignoring the cost to a business of issuing options. When Berkshire acquires an option-issuing company, we promptly substitute a cash compensation plan having an economic value equivalent to that of the previous option plan. The acquiree's true compensation cost is thereby brought out of the closet and charged, as it should be, against earnings. The key point is that this is a standard accounting practice, and as such has no special implications for Dell, but for all companies which participate in this kind of compensation. Therefore, you have a valid point that this practice should be a shareholders' issue not a company specific issue. I think that some bears are so enthusiastic about any Dell issue that could be construed as a flaw that it gets a disproportionate weighting in the overall gloom strategy. I'm neither defending nor supporting the compensation strategies, I just find it incredible that Dell could perform as it has over the past five years with all these burdens and problems. Regards, Lee