Go to Jeff Salisbury LWGate Home Page.From: "Tom Worley" <stkguru@netside.net>
Subject: Re: [CANSLIM] Worley's W W - Japan and TYC
Date: Sat, 9 Feb 2002 12:19:32 -0500
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This is a multi-part message in MIME format. - ------=_NextPart_000_000A_01C1B164.07DA0860 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Hi Rolf, I will tackle the Tyco question first, it's briefer. What Tyco did is both understandable and legal. They made no = announcements on many (something like 750) small acquisitions. I have = not studied their 10Q and 10K, but I am told that they accounted for = these acquisitions with a footnote to the cash balances. That's pretty = subtle, since apparently there was no mention of them in the Management = Discussion section. Gives the impression they were trying to hide them. = For a shareholder, the concern would be that they were wasting money or = buying the wrong companies or over paying for them. Most big companies = doing lots of little acquisitions just put out a news release on a = collective group of them. On Japan, keep in mind that we are in a global economy. Certainly there = must be US banks that have loans outstanding with Japanese corps, just = as there are US mutual funds with investments there. They could all be = hurt, as would be their shareholders. Japanese banks likewise have much = investments in USA corps and property. A small amount of this has = already been liquidated as the capital was needed back home. Much more, = including US Treasuries, might have to be sold, altho the safety and = higher yield of the US Treasuries would make them reluctant to sell = them. All of this could disrupt the US bond and stock markets. Even tho Japan is a net exporter, they do import a substantial amount of = merchandise. Some of this is from the USA, but much of the rest is from = other countries that are also trading partners of the USA. So it's not = only the damage to our export business to Japan that might be affected. = And you are correct, if the yen continues to slide (Erdman suggested it = could go as high as 175 yen to the dollar from the present 133), then = that would make Japanese exports that much cheaper, and more price = competitive, hurting many corporations from the USA and other countries. = The yen has already lost 16% of its value in the past several months. = And it is one of the three major currencies in the world, so 16% is big. As just one example of the affect Japanese spending can have, you only = need to look at gold. In the past week it soared from the $270 or so = range to close over $305. Only reason given that I have found is that = the Japanese are buying as protection against their deflation, = recession, banks failing and losing their savings, etc. So one country = is being credited with sending gold, in a very short time period, to a = new two year high. Think how you would feel if you had $100K sitting in = savings getting about a 1% interest, and found that you had already lost = 16% of its value in three months, stood to lose another 20 or 30% = potentially, and if the bank failed would only have govt insurance = covering part of the deposit, and might have to wait a while just to get = that. Better to take what's left and buy gold thinking it will hold = value, and is US dollar denominated. And it's a traditional form of = savings for the Japanese. Trouble is, that money is no longer available = to the bank to use for loans. Several years ago, we had a currency crises that started in Asia, and = eventually affected the entire world. It sent a number of nations into = recession. The "buffer" that prevented the damage being any worse, and = lessened its effects on US investors, was the strength of the US economy = at the time. Neither the USA, nor the world, has that going for it at = this time. I believe the US economy is beginning to recover, Europe will = follow eventually, as will many other countries. But it would take very = little right now to upset this. =20 Tom Worley stkguru@netside.net AIM: TexWorley ----- Original Message -----=20 From: rolf hertenstein=20 To: canslim@lists.xmission.com=20 Sent: Saturday, February 09, 2002 11:24 AM Subject: Re: [CANSLIM] Worley's W W - Japan and TYC I'm just trying to understand a couple issues raised a bit better. Read the Erdman article on Japan, Tom's comments on it and his WWW = Japan comments. What real impact would a Japanese crash have on our = economy? Do U.S. banks have big loans to Japanese corps? Our exports to Japan = aren't so large that a slow-down in exports to Japan would hurt us, or would = they? With a falling yen would Japanese exports get so cheap that nobody would = buy our goods? As for TYC, even though they didn't announce (press releases) all = acquisitions,=20 they were still properly reported in quarterly reports I believe. So = this is sloppy PR=20 perhaps but nothing wrong (illegal or misleading) me thinks. Correct? Rolf - ------=_NextPart_000_000A_01C1B164.07DA0860 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable <!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> <HTML><HEAD> <META http-equiv=3DContent-Type content=3D"text/html; = charset=3Diso-8859-1"> <META content=3D"MSHTML 6.00.2712.300" name=3DGENERATOR> <STYLE></STYLE> </HEAD> <BODY bgColor=3D#ffffff> <DIV><FONT face=3DArial>Hi Rolf,</FONT></DIV> <DIV><FONT face=3DArial></FONT> </DIV> <DIV><FONT face=3DArial>I will tackle the Tyco question first, it's=20 briefer.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=3DArial>What Tyco did is both understandable and legal. = They made=20 no announcements on many (something like 750) small acquisitions. I have = not=20 studied their 10Q and 10K, but I am told that they accounted for = these=20 acquisitions with a footnote to the cash balances. That's pretty = subtle,=20 since apparently there was no mention of them in the Management = Discussion=20 section. Gives the impression they were trying to hide them. For a = shareholder,=20 the concern would be that they were wasting money or buying the wrong = companies=20 or over paying for them. Most big companies doing lots of little = acquisitions=20 just put out a news release on a collective group of them.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=3DArial>On Japan, keep in mind that we are in a global = economy.=20 Certainly there must be US banks that have loans outstanding with = Japanese=20 corps, just as there are US mutual funds with investments there. They = could all=20 be hurt, as would be their shareholders. Japanese banks likewise = have much=20 investments in USA corps and property. A small amount of this has = already=20 been liquidated as the capital was needed back home. Much more, = including US=20 Treasuries, might have to be sold, altho the safety and higher yield of = the US=20 Treasuries would make them reluctant to sell them. All of this could = disrupt the=20 US bond and stock markets.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=3DArial>Even tho Japan is a net exporter, they do import = a=20 substantial amount of merchandise. Some of this is from the USA, = but much=20 of the rest is from other countries that are also trading partners of = the USA.=20 So it's not only the damage to our export business to Japan that might = be=20 affected. And you are correct, if the yen continues to slide (Erdman = suggested=20 it could go as high as 175 yen to the dollar from the present 133), = then=20 that would make Japanese exports that much cheaper, and more price = competitive,=20 hurting many corporations from the USA and other countries. The yen has = already=20 lost 16% of its value in the past several months. And it is one of the = three=20 major currencies in the world, so 16% is big.</FONT></DIV> <DIV><FONT face=3DArial></FONT> </DIV> <DIV><FONT face=3DArial>As just one example of the affect Japanese = spending can=20 have, you only need to look at gold. In the past week it soared from the = $270 or=20 so range to close over $305. Only reason given that I have found is that = the=20 Japanese are buying as protection against their deflation, recession, = banks=20 failing and losing their savings, etc. So one country is being credited = with=20 sending gold, in a very short time period, to a new two year high. Think = how you=20 would feel if you had $100K sitting in savings getting about a 1% = interest, and=20 found that you had already lost 16% of its value in three months, stood = to lose=20 another 20 or 30% potentially, and if the bank failed would only have = govt=20 insurance covering part of the deposit, and might have to wait a while = just to=20 get that. Better to take what's left and buy gold thinking it will hold = value,=20 and is US dollar denominated. And it's a traditional form of savings for = the=20 Japanese. Trouble is, that money is no longer available to the bank to = use for=20 loans.</FONT></DIV> <DIV><FONT face=3DArial></FONT> </DIV> <DIV><FONT face=3DArial>Several years ago, we had a currency crises that = started=20 in Asia, and eventually affected the entire world. It sent a number of = nations=20 into recession. The "buffer" that prevented the damage being any worse, = and=20 lessened its effects on US investors, was the strength of the US economy = at the=20 time. Neither the USA, nor the world, has that going for it at = this time.=20 I believe the US economy is beginning to recover, Europe will follow = eventually,=20 as will many other countries. But it would take very little right now to = upset=20 this.</FONT></DIV> <DIV> </DIV> <DIV>Tom Worley<BR><A=20 href=3D"mailto:stkguru@netside.net">stkguru@netside.net</A><BR>AIM:=20 TexWorley</DIV> <BLOCKQUOTE dir=3Dltr=20 style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; = BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px"> <DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV> <DIV=20 style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: = black"><B>From:</B>=20 <A title=3Drolfh@mindspring.com = href=3D"mailto:rolfh@mindspring.com">rolf=20 hertenstein</A> </DIV> <DIV style=3D"FONT: 10pt arial"><B>To:</B> <A = title=3Dcanslim@lists.xmission.com=20 = href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>= </DIV> <DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Saturday, February 09, = 2002 11:24=20 AM</DIV> <DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] Worley's = W W -=20 Japan and TYC</DIV> <DIV><BR></DIV> <DIV><FONT face=3DArial size=3D2>I'm just trying to understand a = couple issues=20 raised a bit better.</FONT></DIV> <DIV><FONT face=3DArial size=3D2></FONT> </DIV> <DIV><FONT face=3DArial size=3D2>Read the Erdman article on Japan, = Tom's comments=20 on it and his WWW Japan</FONT></DIV> <DIV><FONT face=3DArial size=3D2>comments. What real impact = would a Japanese=20 crash have on our economy?</FONT></DIV> <DIV><FONT face=3DArial size=3D2>Do U.S. banks have big loans to = Japanese=20 corps? Our exports to Japan aren't</FONT></DIV> <DIV><FONT face=3DArial size=3D2>so large that a slow-down in exports = to Japan=20 would hurt us, or would they? With</FONT></DIV> <DIV><FONT face=3DArial size=3D2>a falling yen would Japanese exports = get so cheap=20 that nobody would buy our</FONT></DIV> <DIV><FONT face=3DArial size=3D2>goods?</FONT></DIV> <DIV><FONT face=3DArial size=3D2></FONT> </DIV> <DIV><FONT face=3DArial size=3D2>As for TYC, even though they didn't = announce=20 (press releases) all acquisitions, </FONT></DIV> <DIV><FONT face=3DArial size=3D2>they were still properly </FONT><FONT = face=3DArial=20 size=3D2>reported in quarterly reports I believe. So this is = sloppy PR=20 </FONT></DIV> <DIV><FONT face=3DArial size=3D2>perhaps but nothing </FONT><FONT = face=3DArial=20 size=3D2>wrong (illegal or misleading) me thinks. =20 Correct?</FONT></DIV> <DIV><FONT face=3DArial size=3D2></FONT> </DIV> <DIV><FONT face=3DArial = size=3D2> Rolf</FONT></DIV></BLOCKQUOTE></BODY></HTML> - ------=_NextPart_000_000A_01C1B164.07DA0860-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email.
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