They're going to interview me in about 10 minutes. What should I say?
> -----Original Message-----
> From: owner-lbo-talk at lists.panix.com
> [mailto:owner-lbo-talk at lists.panix.com]On Behalf Of Jordan Hayes
> Sent: Thursday, January 06, 2000 11:59 AM
> To: lbo-talk at lists.panix.com
> Subject: RE: thegreatcrash.com press release
>
>
> Doug quoting some 20th Century Dudes:
>
> >investors were evidently happy with management's
> >decision to reinvest the earnings. How else can we explain DEC's $15
> >billion market value in 1989?
>
> See: *they* dont' even know how to "value" a company :-)
>
> >The inevitable deceleration of rapid growth is illustrated by the
> >history of IBM, the most famous growth stock of the period after
> >World War 11.
>
> Crikey! I missed World Wars 3-10!
>
> >IBM has paid dividends since the 1930s, but most IBM
> >stockholders bought the stock for growth, not dividends. Throughout
> >the 1950s and 1960s the dividend yield (dividend per share as a
> >percent of stock price) was very low-usually between I and 2
> >percent. Sales, earnings, and dividends grew at compound annual
> >rates of roughly 20 percent.
> >
> >That kind of growth cannot continue forever. By the mid- 1970s IBM
> >lacked investment opportunities attractive enough to justify
> >continued growth at that rate. Yet its existing businesses remained
> >healthy and profitable. Consequently, the firm accumulated cash at
> >an embarrassing rate. It had $6.1 billion in cash and marketable
> >securities at the end of 1976 and $5.4 billion at year-end 1977. it
> >was therefore not surprising to find IBM paying more and more
> >generous dividends: In 1978 it paid $2.88 per share on earnings per
> >share of $5.32, a 54 percent payout ratio. Also, IBM spent about
> >$1.4 billion in 1977 and 1978 to repurchase its own shares. That is,
> >IBM distributed cash to its shareholders by buying shares from them.
> >As Chapter 16 explains, this is essentially equivalent to paying a
> >cash dividend.
> >
> >IBM's high-payout policy continued in the 1980s. From 1986 through
> >1989 it paid out 56 percent of earnings and repurchased 47 million
> >shares for $5.66 billion.
>
> This is all rubbish; IBM is now 4x higher than it was when this was
> written, and it's dividend is down to $0.50 on $4.22 of earnings.
> Yahoo says that's a 0.41% yield ...
>
> Face it: these guys are just making this crap up.
>
> /jordan