Replies

I hope your dire predictions are off as well.

This CBD is to me simply an exaggeration of what many small businesses like myself occasionally do when it's time for a new bank loan. Of course, we do the opposite when it's property tax appeal time...lol. My dad founded a public company so I know that publicly traded companies should not try to sweep bad news under the rug and hope projections will cover their trail. That is esentially what most of these folks did....in a very big way. Enron and WorldCom paid too much for their never ending acquisitions and ended up hoping cash flow would keep up and it obviously did not. Neither of those companies screwed the pooch in one or two quarters...this was years in the making. AOL has done the same thing but they haven't lied as much about it. That huge goodwill write down a few months ago is evidence they overpaid. Now the question of executives making sweetheart loans and timely options when the house of cards is falling is much more troubling to me ...in fact...it should be criminal.

I agree that the DJ can go to 3000 or so but it will take a combination of events beyond emotive reasoning. I have a friend who is an astute S&P futures trader and he thinks the bottom is around 7K. He's usually right but who knows? We won't know for weeks or even months until after it's happened.

BTW, my family is indeed about 60% in equities portfolio-wise...(un-margined fortunately) so we're feeling the pain. We've been hit with Disney, AllState, AOL and ATT after 9-11 this year. Actually T was on the skids prior to 9-11. Disney and AllState will prevail. AOL may splinter and T may be bought by a profitable babyBell....ironic isn't it? AOL has a fat cash flow and a huge subscriber base....they need to re-organize and get the media folks outta there...it looks like they are doing just that. Still, it will be a long road back for them even in a Bull market.

You sure didn't inspire confidence with that one. Of course, the folks that have cooked the books thus far haven't done so just to go get some chump change from the bank; they've done it to drive up earnings, and by extension, their stock prices and their ability to snap up companies (you forgot to mention the "small-fry" that actually touched off Enron's demise, Rhythms).

I'm not nearly as heavy into stocks as you (just my 401k), but I've taken a broad-based hit myself (2 of my funds lost over 20% from Q3 2001 through Q2 2002). I pretty much agree with your assessments of the 4 companies that you mention, though I believe the AOL end was the "bad boy" (not that TimeWarner was a saint).