Thoughts from the Frontline

What Expensing Options Will Do

By John Mauldin

August 1, 2002

What Expensing Options Will Do to the NASDAQ
Bubble, Bubble, Boil and Trouble
Earnings Before Interest and Hype
How Far Away Is the Bottom?
NASDAQ Prediction
The Economy Muddles Through - Maybe
The Bouncing Dollar Bill
Living on Maine Time

What would real profits be for NASDAQ companies if options were expensed? What would the stock price be for the biggest companies in America if investors started to price them based upon correct earnings figures? I give you the numbers in today's E-letter, plus we look at why the dollar is rallying, the economy and more. It should all make for interesting reading.

Bubble, Bubble, Boil and Trouble

I have been writing for the past several weeks about the affect that new and more realistic accounting standards would have on earnings, and thus on stock prices.

A recent 100+ page in-depth report from Bear Stearns suggests that the aggregate operating income for the S&P 500 drops by 12% for 2001 when adjusted for the fair value of employee stock options. 12% doesn't seem like that big…

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