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And Your Point Is. ...
No Sweethearts in This Deal
What is the point of this article by Melissa Davis? First, it isseveral years too late. Second, but perhaps more importantly, a very similar article (and more timely) was written more than a year ago onthe very same subject by an energy industry publication. This is old news and hardly worth printing.
I have been in the M&A business for a while and
, I am sure, had ample opportunity to perform due diligence and I am sure it was sophisticated enough to know a good deal from a bad deal. Goldman didn't make them offer the 40% premium, they came up with that themselves. To insinuate otherwise is not only wrong, it's stupid.
Thomas Favinger, Columbia, Md. (Received Feb. 27, 2003)
Weak Defense of Technical Analysis
Do Your Homework on Technical Analysis
Dear Gary Smith:
Earlier today, in a defense of technical analysis (TA), you referenced a paper by
Lo. In fact, page 1770 of this paper's discussion summarizes it as follows:
The evidence provided here, however, does not support the hypothesis that technical analysis can be used as the basis for profitable trading strategies. Therefore, I do not think that the results of this paper will move academic critics any closer to technical analysis.
So, I would hardly say that the paper makes a convincing case and I think it was rather misleading of you to implicitly present it as such.
Concerning your comment about courses in TA being taught at academic Institutions, as someone who works in academia, let me give you my opinion:
This surge in courses on TA was a reflection of the bubble years, and of certain academics and institutions trying to cash in on this gravy train. During the same period, there were many academic programs started up in mathematical finance (often by mathematical experts with little or no expertise in finance or economics). Today, anecdotal evidence would suggest that many graduates of these programs are unemployed (and the situation is probably worsening, considering that Wall Street keeps making cuts in personnel).
David P.M. Scollnik, Ph.D. , A.S.A., Calgary, Alberta (Canada) (Received Feb. 25, 2003)
A State of Deregulation
Verizon Hints at Further Spending Cuts
Speaking to investors at the Merrill Lynch Global Communications Conference, Verizon CEO Ivan Seidenberg said he was both "confused and angry" about the Federal Communications Commission's decision Thursday to hand wholesale pricing jurisdiction to the states.
If they are ordered to continue subsidizing local competition, the regional Bells will continue to reduce costs by further cutting capital expenditures. The FCC has now lobbed the deregulation ball to the states. So, for starters, Mr. Seidenberg and Verizon can go to New Jersey and ask for deregulation relief in the home state of
Jerome Capp, Cortlandt Manor, N.Y. (Received Feb. 25, 2003)
A Plea for Legal Reforms
Legal Reform Tempts Wall Street
I read with great interest the story about tort reform. The part that struck me hardest was the statement made by Michael Saks, professor of law at Arizona State University, about the awards acting as deterrents of improper behavior. As a professor, I wonder if Mr. Saks has real-life experience.
My own experiences, and those that I have witnessed, have helped me to formulate a low opinion of lawyers. I've seen time and time again, where lawyers effectively "extort" money from defendants, using the threat of "keeping them in court for years" unless they pay up.
Some would say "that is what the disciplinary review board is for." I doubt these people have ever dealt with the disciplinary review board. By their definition, "improper behavior" is physically accosting someone or receiving a settlement check and not forwarding it to the recipient party. This board believes anything an attorney does is "proper" because, well, they are attorneys.
I have heard that there are more students in law school at this time than there are practicing attorneys. God help us all if this is the case! With the ability to legally extort money from people and the huge settlements being awarded, it's no wonder so many people want to be attorneys.
Not all attorneys are bad. But the bad ones are the ones we all hear about -- and I mean, we all hear about them -- even the disciplinary boards. Yet, they are untouchable. They have immunity when acting as the prosecuting attorneyand they make that bad situation even worse by distorting the "zealous advocacy" doctrine: "I can destroy someone I don't like and hide behind my self-regulating body that will allow me to get away with it."
I don't believe that tort reform alone will solve the malpractice issues that are making the headlines, but I do believe that it is a big part ofthe problem. Insurers, physicians, and health care facilities are part of the problem, also. But to think the best thing that could ever happen to youis to have your doctor make a mistake is frightening.
A lapse in judgment is something everyone is guilty of from time to time. What happens when an attorney makes a bad decision? I'll tell you -- the immunity kicks in and they walk. They don't get driven out of business by another self-righteous attorney.
We need legal reform and we need it NOW!
Alistair Kelly, CFP, Sharon, Pa. (Received Feb. 20, 2003)
Missed Positive Impact of Agreement
Does Code Sharing Mean Caring for Air Travelers?
Mr. Gillin fails to make several critical points regarding the positiveeffects of the code-share agreement between Delta, Continental and Northwest, and the impact onthe consumer/corporate traveler.
The frequent flyer will benefit in manyways, including the opportunity for their companies -- that have negotiatedcorporate discounts with carriers -- to enjoy additional cost savings, as aresult of the ratified code-share agreement. Unfortunately, the DOT hasmade several cumbersome stipulations to the code-share agreement thatunfairly impacts Delta, Continental and Northwest. Nevertheless, corporations will benefit from more travel flexibility and choices (schedules/frequency). Keep in mind, low-costcarriers will ultimately determine fares in most markets.
Speaking of fares, when making comparisons between ticket prices todayvs. 1980, you failed to explain to your readers the impact ofFederal taxes on ticket prices. Taxes made up more than 22% of the price ofa typical airline ticket in 2003. Due to soft demand, carriers can'tafford to pass increased taxes to customers, let alone the additional costof security (Terrorism insurance, new secure cockpit doors, etc.).
Taxes onfares in 1980 surely did not reach the proportions seen in today's ticketprices. Taxes on air travel today rival sin taxes levied against distilledbeverages and cigarettes.
Is it reasonable for consumers and air carriersboth to be burdened with such exorbitant taxes? It would appear the federalgovernment is against the consumer and the airlines.
Something to think about.
Bobby Carroll, Wendell, NC (Received Feb. 20, 2003)
Learn to Sell
Don't Aim for the 10-Bagger
Dagen McDowell says "Don't go for 10-baggers." I say, do. In that piece, here are some things she forgotto mention:
Instead of hitting a 10-bagger, you bounce off the wall for doubles and triples. The rule is to learn to sell. It is more important than learning to buy. A lot of those dead dot-coms gave great returns, if one developed a rule (or rules) for selling. Most commentators avoid that, waiting for news, or preaching buy and hold.
By the way,
is still a great investment and wonderful to trade, especially since it is regarded as "overvalued" (LOL).
I look for stocks that commentators say are "overvalued" or "overbought." Bargains get to be bigger bargains (i.e., they go down more) and overvalued stocks tend to get more overvalued (i.e., they go up).
As the man once said, "The trend is your friend."
Martin Greenberg, Kalamazoo, Mich. (Received Feb. 18, 2003)
Video Hasn't Been Kind to Telcos
, both companies come from a tradition of 100-year monopolies, where one competes in their world by illegally going to D.C. to get the government to zap the competition.
Customer service has been the last of their concerns to these folks who think they
the government. They appear to feel one can use the "if we can't beat'em, we'll cheat'em" approach to life.
Alas, there are others on the planet -- e.g.,
-- that innovate. Should the folks in D.C. decide to enforce the law, we could see some innovation again back in the USA!
As Mel Brooks put it, "It's good to be the king. ..." (That is, until the axe falls.)
Robert W. Carter, Austin, Texas(Received Feb. 10, 2003)
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