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Value Investing, My Eye


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Value Investing, My Eye

Nice try. Jeffrey M. Laderman and William Miller can call it "new value investing" if they want to, but I know growth stocks when I see them ("Value investing is back--with a twist," Cover Story, June 14). If Bill Miller is a value investor and if AOL, Dell, and Microsoft are value stocks, then Graham and Dodd are surely turning in their graves.

If you want to enjoy success as an investor in a low-inflation era, buy growth. Remember the "Nifty Fifty" growth-stock era that ran from the onset of low inflation in the 1950s to the OPEC oil embargo of the early 1970s? After the embargo, with inflation raging, value investing became king. Someday, for much the same reasons, value will be king again. As for now, growth rules.

Thomas F. Heald

Eads & Heald Investment Counsel

AtlantaReturn to top

The U.S. Should Stop Wavering on Taiwan

I recently came back from living in Taiwan for 1 1/2 years, and I can assure you the Taiwanese understand the Chinese threat to democracy in Taiwan ("Will China-bashers in Congress shower Taiwan with arms?" International Outlook, June 7). They also understand that mainland China will one day "reclaim" Taiwan, and that the Taiwanese will be unable to beat China in any militaristic show of force without help from other countries (Taiwan's population is 22 million, China's is 1.4 billion).

Yet the U.S. may, of its own accord, lavish weapons on a Taiwan that doesn't want them. Clearly, U.S. lawmakers want to arm Taiwan for one reason: to provide jobs for their constituents.

If we arm Taiwan, will we be prepared to help them use the weapons against China and fight for Taiwanese independence? I doubt it; the consequences are too great. Hence, U.S. lawmakers are asking for trouble--souring our already tense relations with China and creating even more hard feelings between China and Taiwan. The U.S. needs to stop wavering in its stance and either fully support Taiwanese independence from China, or not at all.

Whitney C. Brown

WichitaReturn to top

The Internet Is Not Bringing People Together

How ironic that your artwork for "Open all night" (News: Analysis & Commentary, June 14) is a spoof of Edward Hopper's Nighthawks. Long before the Internet era, Hopper was portraying the alienation in American life. Contrary to what those besotted with computers believe, technology is not bringing people closer together but is driving them further apart. When many people mistrust or do not know their neighbors, the fabric of community is shredded. Talking with strangers miles away through a chat room does not reverse the alienation Hopper documented, which continues to this day.

Deborah C. Sawyer

BuffaloReturn to top

Microsoft Can Afford a Spending Spree

In "Who do you want to buy today?" (News: Analysis & Commentary, June 7), author Michael Moeller highlighted some of the recent "investments" by Microsoft. He noted the strategic fit of several of the acquisitions with Microsoft's goals, such as its $5 billion investment in AT&T.

The economics of corporate finance point to a more obvious purpose for these acquisitions. Microsoft's capacity to generate cash is embarrassing. When businesses generate cash in excess of ordinary business needs, they have two options. Management can admit that shareholders are better able to invest this cash and declare a dividend. Alternatively, companies can invest excess cash on shareholders' behalf.

In the past, Microsoft has used cash to build a solid portfolio of Treasury securities. Chief Financial Officer Greg Maffei probably sensed that shareholders would soon question this strategy. T-bills were watering down company earnings while causing an embarrassing problem in the face of government scrutiny. If cash is a symptom of a monopoly, Microsoft is a big one. Accountants generally associate T-bills closely with cash on financial statements, and Microsoft's was growing beyond several years of company expenses.

With government regulators applying pressure and with shareholders' lofty expectations, Microsoft had little choice but to enter the acquisition trail in a big way. Look for Microsoft to turn up the heat on its acquisition binge as a matter of necessity.

Scott Moser

Bellevue, Wash.Return to top


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