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Non-Tech : Derivatives: Darth Vader's Revenge -- Ignore unavailable to you. Want to Upgrade?

To: Sam who wrote (880)	4/7/1999 6:42:00 AM
From: Henry Volquardsen	Read Replies (3) \| Respond to of 2794

Sam, I'll be interested in Clark's response as well but I thought I would make one observation. He is comparing a static bond coupon with dynamic revenue and earnings. You can do the same analysis comparing the bonds and equity of one company, the bonds will almost always pay you more than the equity on day one. Even if you net out the prospect of capital gains the reason to make an equity investment vs a debt investment is that the revenues and earnings of a business can grow while the coupon on a bond can't. As a disclaimer I am not defending the valuation of the market, just pointing out what I believe is a weakness in that analysis. Henry