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Disney Doubts and Some Real Housing Numbers

Readers comment on <I>TSC</I> stories.

TheStreet.com publishes selected email received by the publication and its staff members. To send an email intended for publication in this section, write to letters@thestreet.com and include your full name and city. Letters may be edited for length, style, clarity and accuracy.

Picture This

James Padinha

: In response to your column

It's Not a Pretty Price Picture, I think your percent increases in housing are way overblown. I have been in a four-bedroom house in Houston for 16 years. I paid about $80,000 for it. In our market right now, it is worth around $96,000. That increase looks a lot closer to 1% than it is to 5%. A new house in this area of similar size would go for about $120,000. That is still nowhere near 5%. These are real numbers, not an inflated fantasy.

--

Dan Pastalaniec

(received 6/21)

Doubting Disney

James Cramer

: In response to your column

Doubting Disney -- Despite the Promotions, I work in the radio business, and I've seen

Disney

(DIS) - Get Walt Disney Company Report

spend millions on buying radio stations to carry Disney programming that no other radio station wants. I'm talking about Radio Disney and ESPN Radio. There is no way Disney can recover the money it has spent on buying stations to carry this programming. If other divisions in Disney are doing things like this, it's no wonder Disney cannot make its numbers.

--

Kyle Wesley

(received 6/21)

James Cramer

: Your

column on Disney is a story of fallen angels.

A few years ago, I ventured down to Orlando with the family. We waited over an hour for the Dumbo ride, in the hot sun, swatting mosquitoes, listening to crying children. The ride goes up and down, round and round, for two minutes or less. Tired rides. Tired parents. Tired kids. Rotten food.

The next day we went over to

Sea World

. It was much cleaner, much more fun. There were no lines, and the food was better. They also had a nicer staff, with helpful educational guides. All around it was a wonderful experience.

In 1962 all I could think about was

Disneyland

. Now, in 1999, my kids will take a pass on those guys and look for something more fun and interesting.

As for the movies, they have me there, and at

McDonald's

(MCD) - Get McDonald's Corporation (MCD) Report

. I love their double cheeseburgers.

--

Patrick Vale

(received 6/21)

James Cramer

: Your

comments on Disney are probably right on for a successful trader. However, to me at least, Disney appears to have many of the elements that over the years have made

Warren Buffett

a successful investor. Your article highlighted many of the reasons that I enjoy picking up Disney at its current valuation to hold for the next 50 years. I suspect that you trade the

eBays

(EBAY) - Get eBay Inc. Report

,

Amazons

(AMZN) - Get Amazon.com, Inc. Report

and

Yahoo!s

(YHOO)

of the stock world.

Someday someone will suggest looking at their numbers, and you will move on to trading something else very successfully at that time.

--

Todd Rudsenske

(received 6/21)

R-E-S-P-E-C-T

Thomas Lepri

: In response to your

Weekend Report: After Overtures by Yeltsin, the 'G8' Takes Shape,

Saddam Hussein

is a "

respectable

" seventh on the list of billionaires.

Respectable?

-- Mike Letton

(received 6/21)

Real Market Tells

Dave Kansas

: Regarding your piece

Keeping Your Eye on the Ball, and Japan, and Intel, I did not attribute the recent slide in

Intel

(INTC) - Get Intel Corporation (INTC) Report

as a "market tell." I put it into the localized Intel category of manufacturing or design setback. I think the price slide started with the announcement of the Coppermine delay due to low yields in the test process, then followed the analysts' downgrades.

I certainly see pricing pressures in the PC area along with competition from

Advanced Micro Devices

(AMD) - Get Advanced Micro Devices, Inc. Report

, which has a viable product to compete. Assume if you will, that AMD will announce some manufacturing problems as well; they always do.

Compaq's

(CPQ)

problems over the past six months seem internal.

Iomega's

(IOM)

problems over the past few years also seem internal. I still see all these issues as localized instead of market tells.

-- John Scott

(received 6/18)

Fourth Estate Fumbles

Cory Johnson

: In response to your column

How the Fourth Estate Fumbled the barnesandnoble.com IPO, I enjoyed your comments and wholeheartedly agree. IPOs that go up by a factor of 10 indicate that the offering price was chosen badly. It makes the IPO a failure, not a success -- most of the money raised by the IPO flows to the institutions that got an allocation of stock, instead of the company trying to raise money. It would be nice if these journalists -- who provide a large part of the education that retail investors get -- could get a clue on this. Also, if they could learn basic math and stop using annoying and oft-repeated words like "highflying," "skyrocket" and "soar," it would sound much smarter.

-- James Egelhof

(received 6/18)

Cory Johnson

: I read your excellent

piece on IPOs. I usually look to see what you're writing about. I had to read it twice to get the point, but don't despair, I read

James Padinha

three or four times and still don't get it. Anyway, it was educational to this flatfoot. I just retired from 22 years in the news corps and am studying for my Series 7 to get in the business.

Now, that word. We have "hot, highflying" Internet stocks, the "tech-heavy"

Nasdaq

, the "interest-rate-sensitive" utilities (that are not always so interest-rate-sensitive anymore), and how do you "up" something? I really get a rise out of hearing that

Goldman Sachs

"upped" this or that, or are "upping" that or this. I have respect for only one word that is that flexible, and it has four letters. Finally, we hear hourly "what's up at the bottom of the hour" on

CNBC

and every "swinging Richard" out there is "going forward" in every sentence.

Where did they think we thought they were going?

-- Russell Miller

(received 6/16)

Minor League Management

Brenda Buttner

: About your article

Bottom-Dwelling Managers Offer No Excuses, Just Promises of Improvement, I agree. These guys are like baseball players. They get the big bucks for failing eight out of 10 times. Don't they have any pride? How can you not even know why you are doing so poorly! If you don't know, then you don't care! It's no wonder the index funds are beating the pants off these people. They're incompetent.

-- Branson Willis

(received 6/17)

Amazon's Expansion

Suzanne Galante

: In response to your article

Once Wary of Warehouses, Amazon Branches Into Bricks-and-Mortar Tributaries, although you did an adequate job of writing the article, you really missed the central point of how

TheStreet Recommends

Amazon

(AMZN) - Get Amazon.com, Inc. Report

is different.

Being Net based, Amazon is open 24/7. None of their competitors matches those hours. They can be reached from your keyboard from anywhere in the world, not just your nearest neighborhood store.

In fact, Amazon has added warehousing. It's true these building are built of brick and mortar. But you never got around to mentioning that the major costs of their competitors are the retail stores. Each retail store has tremendous inventory, real estate costs and high personnel costs each and every month in addition to the warehousing costs similar to Amazon's.

Keep in mind, Amazon is or has developed a global brand name in books, videos, music, pet stuff, drugs, groceries -- all from these same warehouses.

-- George T. Selin

(received 6/17)

Did it occur to you that Amazon may be

increasing the amount of warehouse space for more than just books? Cut the Net companies some slack. Things change at a very rapid pace!

-- Scott Chaney

(received 6/17)

Getting Greenspan's Point

James Padinha

: In response to your column

Gimme Fitty, Sal. I Mean, Alan, I think your 50-basis-point theory misses the essence of

Alan Greenspan's

comments. The

FOMC's

main goal is to assist as much as possible in maintaining the long-term health of the economy.

He specifically addressed the issue regarding the tailwind effect of the stock market vis a vis its contribution to consumer spending and its subsequent contribution to

GDP

. He subsequently was also quite clear in stating the obvious, but it's usually forgotten that the market will take care of itself. The message of these two paraphrased statements seems rather clear to me. He will raise rates 25 basis points. He will not raise rates 50 basis points.

Don't get me wrong, I wouldn't mind a 50-basis-point bump. It would wash out the weak holders. We could start fresh and leave room to loosen in the fall when the threat of Y2K is hanging over everyone. However, Alan Greenspan is not a meddler. He has too much respect and belief in free-market dynamics. I suspect he will let the market take care of itself and tap the brakes only lightly with a 25-basis-point hike.

-- Michael Bernstein

(received 6/17)

Shelter From the Tax Storm

Tracy Byrnes

: In response to your article

Global Tax Forum: Offshore Tax Shelters Aren't Just Something From a Grisham Novel, I thought it was very interesting and informative. However, there is always more than one way to skin a cat.

The

IRS

requires all assets held in foreign countries to be reported. If you hold stock in a foreign company, you must report that as well. To fail to do so would be considered tax evasion.

However, countries that have cooperative agreements with the U.S. in the case of criminal activity have laws vastly different than those in the U.S. Money laundering from drug activities is high on everyone's prosecution list, unless of course you have paid off the proper politicos. Then they can proclaim your innocence loudly and be unable to locate any element of such activity in their banks.

On the other hand, for those wishing to cheat a little bit, there is plenty of opportunity with little likelihood of ever being found out. That is, if you are willing to keep your mouth shut and not brag about how smart you are. There is a host of tax-saving methods that can and are used successfully.

-- Herb Ashendorf

(received 6/17)

Tracy Byrnes

: I just wanted to make a comment about your offshore trust

article. You seem to have left out a rather important location for these trusts: Bermuda. As someone who lived on the island for a couple of years, I would place Bermuda higher up on the short list compared with some of the other jurisdictions the article mentioned. Also, from my experience with offshore trusts in Bermuda, the fees you mention seem rather steep for most generic asset-protection trusts. Regarding European offshore centers, I would have thought Guernsey and Jersey would have taken precedence over Isle of Man for trusts on this side of the world.

-- Mark Holman

(received 6/16)

Playing the Oracle Game

James Cramer

: In response to your column

Finishing the Switch, I have a different version for so many upgrades on

Oracle

(ORCL) - Get Oracle Corporation Report

.

I don't think the analysts were sandbagged. I think they were playing the game with Oracle. While the public had no confidence in the stock, the price stayed low while the major houses loaded up. After the earnings report, they could sell by upgrading. They could end up with a $7 profit on a $25 investment. They weren't stupid at all. It's part of the game.

-- Don Wilber

(received 6/16)

Loyalty to eBay

James Cramer

: In response to your column

Amazon's Latest Deal Further Threatens eBay's Auction Biz, another death knell for

eBay

(EBAY) - Get eBay Inc. Report

.

Loyalty to eBay is deeper than most expect. People do not use eBay because they want to rid themselves of a

Sotheby's

(BID) - Get Sotheby's Report

quality antique.

Amazon

(AMZN) - Get Amazon.com, Inc. Report

can grasp all it wants at an Internet auction site, but it will come up short.

A loyal eBay user,

-- Stephen Strelecki

(received 6/16)

James Cramer

:

Just browsing, said the customer to the clerk! More site hits for Amazon.com, but sales from a Sotheby's auction? Highly doubtful! I'll browse, but I can't afford the price tag.

-- Penny Sieffert

(received 6/16)

Compaq and Dell: Taking Bitter Pills

Eric Moskowitz

: In response to your article

Parts Are Such Sweet Sorrow to PC Makers, I have to question the money manager who thinks it is great that

Dell

(DELL) - Get Dell Technologies Inc Class C Report

and now

Compaq

(CPQ)

have aggressively entered sub-$1,000 territory. I had the assumption that their cheapest base models were sold for about $1,700. If that is true, then I don't see how selling these new cheaper boxes is going to grow top-line revenue unless it sells two cheap boxes for every one that would have been a $1,700 unit. Even for Dell that seems like a lot to hope for.

Am I completely off the beam in assuming that one company is basically going to have to take almost all the share in the sub-$1,000 range to even have a chance of making up for lost revenues from the higher-priced and richer-margined products?

I would think that the one thing investors in Dell had counted on was Dell holding onto the high end of the market and thus not being exposed to price attrition. There is a horrible combination of factors: a possible Y2K lockdown, inventory glut from competitors and now a potentially large part of sales coming from the low end.

-- Bryan McCormick

(received 6/16)

Carnac's Qwest

Jim Seymour

: In response to your column

Carnac Rides Again: Answers to the Big Qwest Questions, I appreciate your frankness on

Qwest's

(QWST)

proposal to buy

U S West

(USW)

and

Frontier

(FRO) - Get Frontline Ltd. Report

.

To me, this seems like New Deal economics, year 2000 style. It's so new, we can't slam it with any confidence. I own Qwest and thought I owned a company with double-digit growth in revenues, earnings, cash flow and debt reduction.

-- Matt Kohn

(received 6/14)

Jim Seymour

: I

loved the ride! While I don't disagree with

Joe Nachio's

long-term strategy, I do feel that:

  • Qwest received some really bad advice.
  • The timing could not have been worse. Because the market was in the toilet (though Qwest was holding up OK), any negative response had to been exaggerated and, boy, was it.
  • The BellSouth (BLS) investment seemed like the foundation of a beneficial relationship.
  • Joe Nachio has made some mistakes and needs to back out while he still can.

I know, I know, modesty prevents him from doing so.

-- Robert Perry

(received 6/15)