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

FASB's Proposal Solves Little

Re: Options Expensing Ripe for Abuse

To the Editor:

Troy Wolverton's article quotes heavily from accountants pointing accusatory fingers atthe "spotty track record" of corporate America, especially high tech.

My biggest problem with the entire Financial Accounting Standards Board options expensing issue is that it is like putting the foxes in charge of the chicken farm. The Enron and Tycofiascos were not perpetrated by CEOs alone, but with the activeparticipation of their accountant CFOs and their negligent/complicit(Arthur Anderson) auditors.

Now, for the core issue of expensing options, from my perspective as astock investor: I prefer the present system of footnoting. Yes, companiestoday are all over the map with regards to how they estimate their options in their footnotes. But this point only highlights why the FASB's proposal is moronic accounting poppycock! By forcing estimates into earnings calculations, the new, proposed rule will only obfuscate the earnings numbers at which this simple-headed investor looks.

The article focuses exclusively upon how tech companies under-reportoptions expenses today. Of course, this popular scenario is always used tojustify the need for expensing of options to "properly" adjust earnings.However, what is painfully neglected is the reverse case (of the past fewyears), when a tumbling stock market renders billions of dollars of optionsto expire worthless. Under the FASB proposal, these previouslycost-expensed options must now be added back to earnings. So, even thougha company's real earnings may be getting worse, a tumbling stock price willallow a company to report less-bad earnings that are artificiallyinflated by the FASB-mandated "stock options expensing." As a simple stockinvestor, I can't even imagine trying to de-convolute these "earnings"reports to discover the real health of a company.

Lastly, although the article didn't even address my discussed concerns,the title jumped out at me that "options expensing is ripe for abuse" (byaccountants)! Now for some positive feedback, perhaps the FASB should tryto enforce uniform guidelines on how to properly expense options infootnotes, before they thrust their mandates on completely rewritingearnings reports (and rendering them useless to common investors such asmyself).


James Chen, Palo Alto, Calif., (Received June 29, 2004)

The Carly Fiorina Attack Is Not Fact-Based

Re: The Nation's Worst CEOs

To the Editor:

Jon Markman's recent column excoriating Hewlett-Packard's Carly Fiorina as one of America's worst CEOs brings to mind the old wisdom that, "It ain't so much the things we don't know that get us in trouble. It's the things that we know that ain't so."

Mr. Markman bases his case around six facts he uses to make his argument. Each is pithy. Each is quotable. Each is completely untrue.

Let's take them in turn.

  • First, Mr. Markman contends that Hewlett-Packard's merger with Compaq has "utterly failed to deliver on its promise." Not true. The promise of the merger was to put H-P back in a leadership position at the very center of the industry.

    Today, H-P is now No. 1 or No. 2 in virtually every market, customer segment and region in which we compete, and proving Jack Welch's old axiom that only businesses that are No. 1 or No. 2 create sustainable revenue and profit growth.

    We delivered $3.5 billion in merger-related cost savings, $1 billion more than planned, one year ahead of schedule. And we have now returned to strong top-line performance, growing 9% and 12% year-over-year respectively in Q1 and Q2 of FY04.

    Indeed, we are on course today to close FY04 with $7 billion in organic growth ... in other words, our organic growth this year will create a company larger in revenue than EMC.

  • Second, Mr. Markman contends that H-P is not profitable in personal computers. Not true. In FY03 (our last fiscal year), we were one of the only two major PC vendors to make a profit in PCs, and we did this while checking Dell's share gains and swapping the No. 1 share position back and forth. In the last three quarters, we have outgrown Dell in PCs and notebooks, while posting a 19% year-over-year revenue growth, while doubling our profits. Compare that to IBM's PC business, which went from a profit of $47 million to a loss of $118 million in the same period.

  • Third, Mr. Markman contends that HP is not profitable in mainframe computers. Not true. Actually, we don't have mainframes. But our high-end servers are profitable, and have been for three quarters in a row, and in many cases, lead the market.

  • Fourth, Mr. Markman contends that HP is not profitable in services. Not true. Our services business is turning a profit, recently landed what one magazine called "the richest prize in technology" -- Proctor & Gamble's huge $3 billion IT contract -- and just this month, was named in a study of 12,000 IT managers and professionals as No. 1 in customer satisfaction.

  • Fifth, Mr. Markman contends that our printer business is being "hollowed out" by Dell. Not true - in fact, slightly delusional. H-P ships more printers in one month -- more than one million -- than Dell ships in one year, and that number is increasing. In fact, in 2004, consumers are buying H-P printers at a rate of more than one per second. Studies show that Dell's gains are actually coming at the expense of other competitors -- primarily Lexmark -- and not H-P. In fact, our Imaging and Printing business is going from strength to strength, as evidenced by our ability to further improve the profitability of the business. For example, in FY01, H-P's last year asa standalone company, the Imaging and Printing business had operating margins of 10.1%. In FY03, our last fiscal year, operating profits in the business increased to 16.4% of revenue ... far in excess of our competitors.

  • Sixth, Mr. Markman then contends that despite being "hollowed out," H-P's printer business still brings in the majority of the entire entity's earnings. We are proud of the printing franchise we have built and the best-in-class financials this business drives. However, despite the fact thatthe business is more profitable than ever before, H-P is less dependent on the profits from Imaging and Printing, as the rest of our businesses returned to profitability and have begun contributing to earnings. In fact, each of our major lines of business has now been profitable for three quarters in a row -- validating the success of the merger.

    In FY01, again, H-P's last year as a standalone company, the Imaging and Printing business accounted for 138% of segment operating profit. In FY02, this number was 107% and in FY03, this number was 79%. So, while the Imaging and Printing business is clearly the profit driver of the company, the progress we have made in the other businesses has made us less dependent on Imaging and Printing operating profit.

    By contrast, Mr. Markman correctly points out that many other analysts are giving Carly Fiorina credit for improving results and turning H-P around. We think there is good reason for that: five years ago, when Carly took over as CEO, H-P had grown bloated and unfocused, growing in the low-single digits in the middle of the biggest technology boom in history, while missing nine quarters in a row. She began a reinvention -- consolidating 87 separate product divisions down to four, optimizing 26 supply chains down to five -- culminating in the Compaq merger (which, again, ultimately produced more than $3.5 billion in savings, $1 billion more than predicted, a year ahead of plan.

    Today, what most people see is a Fortune 11 company with an $80 million annual run rate; with an accelerating rate of patent innovation (11 new patents a day, fifth in the world); with $15 billion in cash on hand; leading nearly every market in which it competes; growing profits in every business with better balance across our portfolio; generating revenues 9% YOY in Q104 and 12% YOY in Q204, beating Street expectations by $800 million; and leveraging the depth of its portfolio to lead the creation of new categories such as digital photography and digital entertainment, through new relationships with media and entertainment companies including Disney, DreamWorks, Time Warner,Avid, Universal Music Group, Starbucks, and Apple.That is one of the reasons why Gartner, Forrester and Meta post-merger are now recognizing H-P as a market- and thought-leader in several key growth categories including utility computing, management, blades, managed services and our overall adaptive enterprise strategy.

    Frankly, we were surprised that Mr. Markman's list of worst CEOs didn't include the leadership of companies like Enron and Tyco, who took millions from their companies while leaving so many investors and shareowners penniless. His disagreements with Ms. Fiorina, while not based on fact, seem more to do with disagreements over strategy and direction -- strategic choices, might I add, that have been informed by a deep understanding of customer requirements, market dynamics, the competitive landscape, H-P capabilities, shareowner interests and employee ambitions.

    But remember, we are a company that believes that everything is possible. If he is willing, we cordially extend an invitation to Mr. Markman to come out to Palo Alto and see what so many others have seen -- that H-P is a company built for the future and poised for growth. To suggest anything different just ain't so.


    Allison Johnson, SVP, Corporate Marketing, Hewlett-Packard, (Received June 28, 2004)

    Avoiding 'Mangled Packages'

    Re: Net Phone Threat May Ring Hollow for Bells

    Dear Mr. Moritz:

    I am a VoIP professional.

    To avoid the "mangled packets" your article discusses, cable companies willhave to invest in the infrastructure ( Cisco or Juniper) that creates the equivalent of "high-occupancy vehicle" lanes in their plants. The only alternative is reducing the end-to-end delay substantially.

    Vonage, Net-to-phone, et al, have no way to do that as long as they must use RBOC gateways to reach non-VoIP users and rely on servers to associate calling endpoints with each other. The RBOCs are best-positioned for VoIP, as they install fiber to the home. They will make a profit, not the cable companies.

    Skype (from the makers of Kazaa) is a long-term "fly in the ointment." I use it with others who have downloaded the free software. It behaves much like Instant Messenger for voice, and the quality is extraordinary. Technically, it reduces the delay by peer-to-peer networking (no servers to divert the path and add delay). Skype is developing a community that will use its service similar to the community developed by music sharers. However, oncethey have to use gateways to call non-Skype users, they're back into the server mode. It's hard to imagine how it will make money charging for the gateway use, because it compromises its peer-to-peer advantage and can't be much better than Vonage.


    Chet Seligman; Point Reyes Station, Calif., (Received June 25, 2004)

    The Market Tunes Out Radio Commercials

    Re: Wall Street Sounds Off on Radio Daze

    Dear Mr. Mannes:

    Those Wall Street analysts you quoted forgot one thing: Satellite radio. Just last year those guys were saying that no one would pay for something they can get for free. Now XM and Sirius have 2.5 million subscribers between them.

    What's one of the main points in their advertising? No commercials! Two-and-a-half million listeners are willing to pay to get away from annoying commercials, while getting better radio. This, coupled with overall declining levels of listeners for broadcasters, means advertisers are wasting their money on broadcast radio. No one listens anymore. Clear Channel et al supply nothing more than background noise. The real listeners are moving to satellite. Investors in broadcast radio can look forward to long, slow fade.

    Investors and analysts have a very good example of what's going to happen with broadcast/satellite radio in cable/broadcast TV. I expect radio to follow the same path, though it may not take as long for satellite to overtake broadcast as it took cable to overtake broadcast TV, since consumers are now used to paying for programming as opposed to cable in the 1970s, when you had to be an "idiot" to pay for TV.


    Philip Gribosky, Norwalk, Conn., (Received June 21, 2004)

    Righting the Record at Ryanair

    Re: Low-Fare Turbulence Tags Ryanair

    To the Editor:

    Peter Eavis' recent piece of analysis, "Low-Fare Turbulence Tags Ryanair," contains a number of factual errors. I thought it might be of assistance to bring the errors to your attention as follows:

    1. Aer Lingus is not "snatching away passengers" on any of Ryanair's routes. In fact, much of Aer Lingus' return to profitability in the last 12 months has been as a result of switching capacity away from routes where they compete with Ryanair (Ireland-UK) onto routes where they can avoid competition with Ryanair (mainly the Ireland-European market). The last available market share statistics are for the month of December 2003. They highlight the enormous extent of the switch, in which the polar opposite is the case -- namely, Ryanair is snatching away passengers and share from Aer Lingus.

    Market Share
    Aer Lingus Vs. Ryanair
    Market Share Aer Lingus Ryanair
    Dublin-Luton Dec'02 37% 41%
    Dec'03 29 47
    Dublin-Birmingham Dec'02 54 46
    Dec'03 29 61
    Dublin-Edinburgh Dec'02 36 64
    Dec'03 20 80
    Cork-London Dec'02 54 46
    Dec'03 47 50
    Shannon-London Dec'02 49 51
    Dec'03 48 52
    Source: Company

    2. Our results demonstrate quite the opposite of your claim that "Ryanair may never recovered its own fat profit margins." We continue to guide that our profit margin for the coming year, despite the January profit warning, will be 20% after taxes. No other airline comes close.

    3. The Ireland-UK routes are not Ryanair's "most profitable routes," because they tend to suffer from the highest airport charges. They are at the lower-end of our route profitability.

    4. The ABN Amro analysis of the Ireland-UK market is incorrect. As at December 2003, this market accounted for less than 25% of total traffic -- just over 25% of revenue, but under 20% of profitability.

    5. You state in reference to Aer Lingus that it has "no doubt (been) stealing passengers from Ryanair." The factual evidence of traffic patterns is that Aer Lingus has been ceding passengers and markets to Ryanair, which is not dissimilar to previous market trends in the U.S., where high-fare majors have been forced to cede point-to-point markets to Southwest.

    6. You suggest that flag carriers can now "play offense" and take back market share from Ryanair. Again, the evidence of the last 12 months proves the opposite, as an enormous traffic share and switch away from the flag carriers to Ryanair has taken place, as the above market share chart demonstrates.

    7. Finally, you suggest Ryanair's response was to "look for new routes that the flag carriers don't fly, and hope that people want to use them." Why then would we have allocated almost all of our new aircraft capacity this year to two new bases in Rome Ciampino, where we operate seven routes in head-to-head competition with Alitalia, BA, Iberia, Air France and Lufthansa, and in Barcelona Girona Airport, where we operate in head-to-head competition with Iberia, BA, Air France, Lufthansa and Alitalia as well? These new bases, whilst only in their second month of operation, are already booking well, as Ryanair continues to "snatch away" passengers from the flag carriers.

    On a more macro level, isn't it perhaps indicative that Ryanair will make 20% after taxes this year, when many of Europe's flag carriers (including Lufthansa, SAS, Alitalia and BA among others) announce losses or substantial downturns against previous-year earnings?

    Yours sincerely,

    Paul Fitzsimmons, Head of Communications, Ryanair (Received March 25, 2004)

    Clearing Up Insurance Product Confusion

    Re: How a Doctor's Visit Helped Hedge Funds Trade Annuities

    Dear Editors:

    After reading the above article, I was forced to once again conclude that anyone who writes for the securities business world is technically ill-equipped to explain any sort of insurance product. The writers sway back and forth from describing the abused product as being variable annuities and then life insurance. They are not one in the same.

    The only time that one would undergo health underwriting for an annuity would be if they were purchasing a single-premium immediate annuity on a life contingency and wanted to show that they were an impaired risk, i.e., they don't have long to live so they are looking for a higher monthly payout. Otherwise, there is no underwriting required on any deferred annuity that I have ever heard of.

    Life insurance is a completely different story. Now, it could be that your writer intended to describe a modified endowment contract, a single-premium life insurance contract that is overfunded so that it fails the TAMRA 7-pay test and, as such, has the tax treatment of an annuity on lifetime distributions and death benefits like a life insurance contract.

    If that was so, then say it! The article as written is very confusing to those of us who understand insurance products, and is a disservice to the layman who has been taught by the popular press to run and hide whenever the topic of insurance is brought up.

    Rand Sortland, CLU, ChFC, Hudson, WI, (Received March 11, 2004)

    Eisner Has a Winning Track Record

    Re: Disney Foes Still Gunning for Eisner Dear George:

    Has anyone in the media stood back and looked at Eisner's track record over the last two decades? If you bought 200 shares of DIS the day he took the helm, your basis was, let's say, $14,000-$15,000. (I don't know the exact figure, but I know Disney was in disarray when he took over.) That investment today, with dividends reinvested, is about $260,000. And that's with the underperformance in five of the last six years.

    I'm sure one can find fault with Eisner's capital-allocation decisions andhis personnel moves, though I would add that some of DIS' problems werebeyond the control of any one man. Yet, long-term investors must look at aninvestment in its totality. And I would say that Eisner's performance hasbeen more than satisfactory.

    I wonder what qualifications Roy Disney has to pass judgment, other thanbeing a member of the "lucky gene pool."

    Best regards,

    Mark B. Solomon, Roswell, GA, (Received March. 04, 2003)

    Some Auto Stocks Are Smooth 'Selling'

    Re: Two Out of Three IPOs Fail to Dazzle

    You wrote in your column that experts suggest the automotive industry could be a tough sell:

    " TRW is in a sector that has been downgraded by a lot of analysts lately," Morreale said. Last week, Moody's rating agency said "continued sub-par financial performance by certain suppliers may result in selected downgrades" this year.

    How do you then account for the more than 30% rise in Standard Motor Products since its IPO?

    John Moolick, Nanuet, NY, (Received Feb. 04, 2003)

    Delta's Perfect Position

    Re: Delta's Quarter Leaves Investors Unimpressed

    Dear Mr. Gillin:

    In your recent article on Delta Air Lines' third-quarter results, you write:

    "Indeed, Delta faces an uphill battle when it comes to reducing costs, since its contract with unionized pilots isn't up for renegotiation until 2005. Unlike AMR (AMR:NYSE), parent of American Airlines, Delta has not been in a position to get wage concessions from workers."

    This is a misleading statement that, unfortunately, seems quite representative of many analysts' viewpoint. It is true that Delta's employee costs are higher than their competition's. However, you overlook one vital fact: Delta can pay every one of their employees any salary it chooses, except the pilots. The error is to make reference to employee costs, but then act as though pilots are the only employees of the company.

    I know what you're saying -- pilots are the most important employeesin terms of cost savings because they are the highest paid. While pilots are the highest-paid single group of employees, they are still only 8,000 outof 60,000 employees. With their higher pay, they represent approximately 38% of Delta's total labor cost. Delta must negotiate only with those 8,000 employees. The other 52,000 are non-union, and hence, non-contract employees.

    Their salaries are set at Delta's whim to any level Delta chooses. While Delta has made changes to some non-contract employee benefits, it is interesting to note that it has not reduced wages by one penny since 9/11. In other words, Delta has absolute and total control over 62% of their labor costs, but has thus far voluntarily chosen not to lower these costs at all!

    Therefore, although you say, "Delta has not been in a position to get wage concessions from workers," I would contend that it is in the perfect position. Other airlines' managements have to laboriously slug it outwith each and every union on their property, representing virtually all their employees. Delta's position is so perfect, that it does not have to get concessions at all -- it could simply cut all 52,000 non-contract salaries in half, effective today, if it chooses, with or without a bankruptcy threat.

    The undeniable fact is that, even with an expensive pilot contract, Delta has more control over total labor costs than any airline in the industry. Why is no one mentioning this? It seems that the media and Wall Streetare perfectly willing to unquestioningly accept management's assertion that pilot costs are the cause of their financial losses.

    Instead of lamenting the lack of a wage concession agreement with the pilots, perhaps the analysts and pundits should be asking Delta's management why, if their costs are so high, have they not trimmed any of their other employees' wages at all, or better yet, why they are raiding the corporate treasuryto fund bankruptcy proof retirement accounts and lavish bonuses onthemselves.


    Andrew Kronzer, Knoxville, TN; (The writer is a pilot at Delta Airlines) (Received Oct. 20, 2003)

    A Simple Solution for Exec Salaries

    Re: SEC May Give Board Rebels Some Help


    The biggest problem with corporate governance is the compensation given tothe CEO and his cronies.

    I doubt that allowing shareholders to nominate board members will rectifythat, particularly when the CEO has a substantial share of the company.

    The solution is simple. The salaries of the CEO and Chairman should bedetermined by the shareholders. Once a year, the shareholders will vote oneither an increase or decrease of 30% for these positions. The finalcompensation will be determined proportionately by the vote. If the votefor an increase is x and decrease is y the compensation will be increasedby 30% * (x-y)/(x+y).

    In addition, the shareholder could split his vote. For example,if he wanted the salary to remain the same, he could vote half his sharesfor an increase, and half for a decrease. The compensation committee couldoffer advice to the shareholders, and would be responsible for determiningthe form of the final package.

    Ideally, any shares held by the chairman and CEO should not be eligible forthe vote.


    Stephen Cohen, Ma'aleh Adumim, Israel, (Received Oct. 7, 2003)

    Putting RealNetworks on the Radar

    Re: RealNetworks Eyes the Tube Warily


    Sorry for the late comments on this article, but I've just discovered aninteresting bit of news that may be relevant. RealNetworks owns theinternational Internet rights to Rugby World Cup 2003, getting underwayOct. 10. They are offering live audio and 24-hour delayed full video ofall matches of this year's tournament. They don't seem to be pushing it ontheir U.S.-based Web site, but the $25USD subscription is easy to sign up forthrough, the tournament's official website.

    While this isn't going to send RWNK through the roof, I find it interestingon two fronts. First, Rugby World Cup is the third-largest internationalsporting event after the FIFA World Cup and the Olympics. This to me showsa willingness by RealNetworks to see the entire world as a potentialmarket,and not just the United States.

    Second, and most compelling for me as a U.S.-based Rugby fan, RealOne will bethe only way to get live coverage into our homes for the majority of thegames for Rugby World Cup. Additionally, while a few games will beavailable on pay-per-view television, most will be shown on athree-day-delay basis; meaning, our first chance to watch most games at homewill be through RealOne.

    I'm going to go out on a limb here and say it will be a long time beforeTiVo and digital television are going to matter much in the area oftelevised international sport. On the other hand, I know I can watch,usually after only a 24-hour delay, Rugby matches from the World Cup andZurich Premiership (English domestic league), soccer matches from the FABarclaycard English Premier League and Aussie rules matches from theAustralian Football League, all over the Internet. And that's justcoveringsports I'm personally interested in. It seems very likely that much moreisavailable.

    Granted, RealNetworks doesn't have the exclusive rights on all of these,butit seems to me that Internet broadcasters have carved out a niche forthemselves that, for the time being, is immune to competition from U.S. domestic television. Maybe it means nothing. But maybe it can grow fromhere. There are sure to be some sort of Internet rights awarded for theAthens Olympics. We may finally have the choice between watching NBC's blathering idiots sandwiched between commercials for "very special episodesof Friends," and actual coverage of the games over the Internet.

    Perhaps there is a time in the not-too-distant future where an Internetbroadcaster might make a competitive bid to the U.S. sports market. Disney'scommitment to broadcasting the NHL has waned since they bought thebasketball rights, and FOX already tried and failed with hockey. What ifRealOne became the exclusive U.S. broadcaster for the NHL? This could be avery interesting avenue of entry for Internet broadcasting.

    I'm much more interested in Internet broadcasting as a sports fan than asaninvestor right now. But the discovery of Rugby World Cup PLUS on RealOnehas at least put RNWK back on my radar.

    Kind regards,

    Mike Brothers, Pacifica, Calif., (Received Oct. 2, 2003)

    The End of AOL

    Re: AOL Sees Subscriber Losses Slowing


    George Mannes' article on AOL speaks tothe possibility of a continued slowdown in subscribers. However, I thinkAOL's condition is much more grave. Though chairman Logan says "thecompany needs a few more months to improve its forecast of how bad thefalloff will be," I'm afraid the damage is done. As an AOL customersince1999, who has succumbed to price increases and continued spam, I recentlybecame fed up and switched to high-speed cable from my monopoly provider Comcast (don't get me started on their unethical practices in my area). Myconnection is faster and I can think of no reason why I would need AOL (withthe exception of having to change my email address). The other reason Iswitched was spam, which will not go away, regardless of AOL 9.0. Spam andhigh-speed cable will be AOL's downfall.

    Because I have complained to AOL about spam, they have given me sixmonths of AOL for free vs. dropping me as a reoccurring customer. After Charter and Adelphia's questionable accounting practices with regard tosubscriber count and revenue associations over the past few years, I can'thelp but be suspicious of what AOL is going to do to improve forecasts. Unlessmy AOL email account serves me coffee and hunts down spam abusers andpublicly humiliates them, I can't imagine why I would pay 24 bucks amonth.

    AOL's customer base will continue to erode and I can't see any reasonforAOL to existence in the current environment.

    I'm sure I'm not alone.

    David Hill, Los Angeles, Calif., (Received Oct 2, 2003)

    Disclosure: David Hill has no positions in AOL.

    Proposed Education Initiative

    Re: Meet the Biggest Threat to Your 401(k) Plan: You

    Dear Stephen:

    I appreciate your article on an informative basis. However, I am annoyed by the condescension and arrogance of these so-called money management professionals; particularly in regards to the movement of taking the control of 401(k) out of the hands of individuals. That was what FDR did when he instituted the social security tax. Its intent was to offset retirement needs for the financially illiterate investing American public. Unfortunately, it doesn't appear to be working very well.

    It doesn't take an expert to see how the social security system has not lived up to its promises. Moreover, even though I am one of the millions of individual investors that lost substantial amounts from my own portfolio of investments when the bubble burst, I certainly did much better than the so-called professionals. Many (if not most) of these are quite incompetent themselves. Just look at the benefits of index funds over managed funds.

    The problem, as you have pointed out in your article, is ignorance. There is no solution to ignorance when people refuse to educate themselves in the subjects that matter most to their well-being. My proposal would be to make the educational process more widely available and mandatory to children in high school. That way, there would be more exposure for these kids to realize the consequences of their upcoming responsibilities toward themselves and society as a whole.

    Those people who take an initiative to educate themselves, no matter what their socioeconomic status, will always do better than those who prefer to let others make their decisions for them. I don't need or want another tax system that is sold under the guise of better (or more prudent) retirement investment management.

    Best regards,

    Vince Dayton, Bothell, Washington, (Received Sept. 26, 2003)

    Flextronics' Verdict Illustrates Problems in the Business Environment

    Re: Flextronics' Billion-Dollar Bolt from the Blue

    The recent $931 million jury verdict against Flextronics (FLEX:Nasdaq) in a suit over a $2 million business dispute is a perfect illustration of the current business environment in California and elsewhere. Clueless juries doling out these ridiculous awards is a major problem for American business. Why would anyone undertake a contract worth about $20 million in revenue over several years knowing they had this type of risk. It is clear by the verdict that no one on that jury has ever risked any capital in a business venture or has any understanding of business risk. Something has to be done to curb these appalling decisions. I can only hope that Flextronics has legal remedies remaining to right this travesty.

    Joseph Feeley CPA, Linwood Investment Advisors Inc., Feeley, Bonaventura & Hyzy CPA's P.C., Williamsville, New York (Received Sept. 25, 2003)

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