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<DIV><FONT color=#000000 size=2>RT</FONT></DIV>
<DIV><FONT color=#000000 size=2></FONT><FONT size=2>Dividends paid are not a
deductable expense for a C-corp. </FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2>This brings up the interesting point about stock options paid
to compensate corp higher ups. These are also non deductible and they for don't
even show up in earnings per share calculations. This directly inflates
the price of the stock assuming no change in PE ratio for the industry as a
whole. Of course rapidly rising earnings expands PE ratios.</FONT></DIV>
<DIV><FONT size=2>For extreme example: corp A has $10,000,000 in net income in
1997. Executives salary expense is $20,000,000 in 1997. Now these
executive/insiders decide to all work for $1 in 1998 plus stock options. Net
income explodes to $30,000,000 without any improvement in business. The
executives cash in and may even use the $30,000,000 to buy back shares as did
MicroSoft ( According to an article in Investor's Daily MS used 90% of its
earnings to propup its shares as insiders bailed. Bill Gates partner sold 10% of
his stake for a cool Billion+). Of course this is an extreme example but
illustrates what is going on. </FONT></DIV>
<DIV><FONT size=2>The sad thing is pension plans including my own at work are
loaded up with 70% of their assets tied up in the market. The pension fund
managers have a buy and hold strategy that only works as long as the market
moves up. If it goes into a secular bear market ala 1966-1982 they can't hold
on. Why? Because of cash flow. Using my pension plan as an example: they pay out
$9 million a year in pensions plus another $1 million in expenses. Since they
only take in $3 million in contributions there is a shortfall of $7 million.
That shortfall has been made up with stock market profits. What happens when
those profits dry up and turn into losses? Take a look at some of the stock
charts during those the period 1966-1982. Disney for example broke from $120 per
share down to $20 and lay there for 10 years. It is the 10 years of "lay
there" that will force the pension trusts out of stocks at much lower
prices. </FONT></DIV>
<DIV><FONT size=2>A while ago I recommended my pension trust move $100 million
of its total capital of $160 million into bonds. Perhaps $50,000,000 in the
inflation adjusted treasury bonds.This strategy generates $6 million a year in
interest which combined with the contributions of $3 million would cover
the pension liabilily indefinitely and still leave $60 million for speculation
in the stock market. The observation is widows, orphans and pension funds should
not gamble with the "rent" money. </FONT></DIV>
<DIV><FONT size=2>Of course the pension fund director doesn't see the
stock market as a bet that the market will continue to yield 10-30% per year
indefinitly. He views the market as a sure thing exactly like his grandfather
did in 1929 and his father did in 1966. In fact he even uses the same words
verbatim from Wall St Journal articles from those periods. So it is not
surprising that my recommendations fell on deaf ears. As Joe Granville used to
say: "the plot never changes just the names of the
actors"</FONT></DIV>
<DIV><FONT size=2>G</FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV> </DIV></BODY></HTML>
</x-html>From ???@??? Sun May 31 18:17:54 1998
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<DIV><FONT color=#000000 size=2>RT</FONT></DIV>
<DIV><FONT color=#000000 size=2></FONT><FONT size=2>Dividends paid are not a
deductable expense for a C-corp. </FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2>This brings up the interesting point about stock options paid
to compensate corp higher ups. These are also non deductible and they for don't
even show up in earnings per share calculations. This directly inflates
the price of the stock assuming no change in PE ratio for the industry as a
whole. Of course rapidly rising earnings expands PE ratios.</FONT></DIV>
<DIV><FONT size=2>For extreme example: corp A has $10,000,000 in net income in
1997. Executives salary expense is $20,000,000 in 1997. Now these
executive/insiders decide to all work for $1 in 1998 plus stock options. Net
income explodes to $30,000,000 without any improvement in business. The
executives cash in and may even use the $30,000,000 to buy back shares as did
MicroSoft ( According to an article in Investor's Daily MS used 90% of its
earnings to propup its shares as insiders bailed. Bill Gates partner sold 10% of
his stake for a cool Billion+). Of course this is an extreme example but
illustrates what is going on. </FONT></DIV>
<DIV><FONT size=2>The sad thing is pension plans including my own at work are
loaded up with 70% of their assets tied up in the market. The pension fund
managers have a buy and hold strategy that only works as long as the market
moves up. If it goes into a secular bear market ala 1966-1982 they can't hold
on. Why? Because of cash flow. Using my pension plan as an example: they pay out
$9 million a year in pensions plus another $1 million in expenses. Since they
only take in $3 million in contributions there is a shortfall of $7 million.
That shortfall has been made up with stock market profits. What happens when
those profits dry up and turn into losses? Take a look at some of the stock
charts during those the period 1966-1982. Disney for example broke from $120 per
share down to $20 and lay there for 10 years. It is the 10 years of "lay
there" that will force the pension trusts out of stocks at much lower
prices. </FONT></DIV>
<DIV><FONT size=2>A while ago I recommended my pension trust move $100 million
of its total capital of $160 million into bonds. Perhaps $50,000,000 in the
inflation adjusted treasury bonds.This strategy generates $6 million a year in
interest which combined with the contributions of $3 million would cover
the pension liabilily indefinitely and still leave $60 million for speculation
in the stock market. The observation is widows, orphans and pension funds should
not gamble with the "rent" money. </FONT></DIV>
<DIV><FONT size=2>Of course the pension fund director doesn't see the
stock market as a bet that the market will continue to yield 10-30% per year
indefinitly. He views the market as a sure thing exactly like his grandfather
did in 1929 and his father did in 1966. In fact he even uses the same words
verbatim from Wall St Journal articles from those periods. So it is not
surprising that my recommendations fell on deaf ears. As Joe Granville used to
say: "the plot never changes just the names of the
actors"</FONT></DIV>
<DIV><FONT size=2>G</FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV> </DIV></BODY></HTML>
</x-html>From ???@??? Sun May 31 18:17:57 1998
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> DBC does not keep history on FOREX symbols.
they dont keep ANY history on ANY product they transmit - on top of it,
unfortunately OMEGA doesnt bother to offer refresh data for FOREX
aswell....but they dont offer DTB or LIFFE or MATIF,,,,,so why cry...<g>
rgds hans
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