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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (29987)	7/20/1998 5:58:00 PM
From: Knighty Tin	Read Replies (2) \| Respond to of 132070

To All, Stillwaters ran deep this quarter, stock gurus are ripping off Internet chatters and IBM's latest work of fiction is in print. <G> 1. Stillwater earned 15 cents last quarter, compared to a loss of 3 cents in the previous quarter. Without their hedging program, they would have turned those digits around and earned 51 cents. In the futures market it is a given that speculators lose and hedgers win. I have often argued that that is nonsense. Thank you, SWC, for making my point. I still like SWC, though the stock has popped nicely since I bought my first third, back when the Earth was cooling. The hedging program was an example of lousy timing, but the fact that they greatly increased production impressed me. And everyone knows how much I love platinum and palladium. I even say nice things about rhodium, and I don't even know what it is. <VBG> 2. The market is excited about IBM's "better than expected" quarter. Folks, this one smells like a disaster to me. First, nearly all of the mighty 4.9% increase in earnings per share (even you can earn less than a Treasury bill while taking much more risk) was due to a tax decrease. Revenues were flat and margins were down. Hardware sales stank the house out and all the growth was in the "services" and software business. I like the services business, but the accounting there is kinda funky. Are they recognizing revenues and profits today that they won't receive for a long time? Are we certain they will receive them? The balance sheet numbers would make me ask the question if I were allowed to ask questions of Skip to My Lou. Cash fell by nearly 28%, while debt increased by 3.5%. Makes you want to say, "HMMMMMMM!" Shareholders equity fell by 6.3%. Interest expense, due to Alan G. pumping credit into the system, declined more than 10% on higher debt levels. Huh?!!!! Sounds like the banks are giving money to IBM. My comment is, even if you believe the numbers, the quarter was lousy. If, as I do, you think the numbers may be a wee bit overstated, it was really bad. IBM is a real operating company, but as far as the market is concerned, they are an accounting wizardry, stock buy/back, cash eating, debt piling wonder. I am too old for the Wonder Years. <G> 3. I had a nice conversation with a reporter from Dow Jones Business Service. She is doing an article on financial discussion sites, ala SI. I doubt if I will be quoted in any meaningful way. Her focus is that new investors are being led down the path to financial ruin by Internet gurus with no qualifications. My comment was that, though some of that is true, that is the smaller part of picture. I made the point that these financial discussion forums thrive because Wall Street analysts and the media are not doing their jobs. That is not a grabber for folks in the media. <G> As I said, she was very nice, but I'm afraid she had the spin for her story set before doing the research and most of my comments didn't fall into the wake of that spin. BTW, a reporter named Something Female Louie from The San Francisco Chronicle did a similar article a week or two ago. Louie really dropped the ball and did a lousy job. She pushed her spin by ignoring things like facts. I hope this reporter does better. Good luck, MB