From Pitt to Greenspan

After a 2,500-mile journey, certain questions come to mind. Does Greenspan need a new speechwriter? Has a new bull market begun? Will Pitt ever get it? Are there restrooms at the next exit? It's time to open up the mailbag.

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By Rex Moore (TMF Orangeblood)
December 3, 2002

Here's hoping you all enjoyed your Thanksgiving holiday. I know I did, even though it involved a 2,500-mile journey from Virginia to Oklahoma and back in a van with two kids fighting over whether to listen to the A-Teens or Porky Pig's "Blue Christmas," and a vow never to drive through the state of Arkansas again because of that cruel stretch of alleged highway known as I-40, which has been under construction longer than the pyramids.

With that trip out of the way, I thought I'd take some time today to answer some of the mail that piled up while I was away.

The first note comes to us from a Mr. H. Pitt in Washington, D.C., who writes, "I don't understand what all the fuss is about. Why did people get so riled up that I neglected to mention one little detail about William Webster's involvement in a company facing lawsuits over its accounting practices?"

I understand your frustration, Mr. Pitt. But I guess most investors just have this odd notion that an agency designed to keep public companies honest and aboveboard should practice those very same qualities itself. Perhaps that's why many folks were put out in first place that you pushed Webster to head the Public Company Accounting Oversight Board instead of John Biggs, who seemed better qualified to bring reform to the industry.

Also, we saw your list of excuses, and while they were uproariously funny, not one of them mentioned the word "barbecue."

Our next question is from an investor in Seattle, Wash., who asks, "What's up with this big rally? One of my former $100 stocks actually doubled in the past two months, from $1.20 to $2.40. Are happy days here again?"

Not unless you're watching reruns of Richie and Fonzie on Nick at Nite. But while we may never again experience the kind of bull market we saw in the '90s, the stock market is still the best vehicle for average Americans to build wealth over time. Don't expect miracles, and don't expect that $2.40 stock to reach the century mark again (it has a much better chance of hitting zero). But if you stay diligent, keep learning, and put a little away each month, your odds of having a comfortable retirement will skyrocket. (Did I say skyrocket? How about, "increase greatly"?)

Now we turn to Mr. A. Greenspan, who writes, "I've been told that I am not an exciting public speaker. Can you help me with my speechwriting?

No problem, Mr. Chairman. Let's start with an actual sentence from your July testimony before the Senate. Speaking about the difficulty of forecasting exchange rates, you said, "The reason that it is so difficult is that an exchange rate is a very complex price that balances, on the one hand, the demand for, for example, dollars stemming from the demand for dollar investments and for U.S. exports against, on the other hand, the demand for foreign currencies by U.S. investors desiring to acquire foreign assets and by U.S. importers of foreign goods and services."

Well, let's see... on second thought, I don't think I can help. The best I can do is provide a translation service for you.

This next one's from a Mr. W. Cook, who writes, "You guys are in the wrong business! I'm charging thousands of dollars for seminars that teach people how to trade in and out of the market by using covered calls and playing stock splits. This is a high-margin operation, and you Fools need to check it out."

Thanks for the tip, Mr. Cook, but I'll follow the advice on your own website and "Stop listening to people making less than what you want to make..." Your company has lost over $3 million trading securities since 2000, according to your SEC filings. That's certainly less than I want to make. Martha Smilgis of the San Francisco Examiner calls your company an "amazing tax dodge" and says, "He rakes in dough selling bogus schemes that lose money for his corporation. And, apparently, for his students." Ouch.

I'll give your PR team the Most Positive Spin on a Desperate Situation award, though, for this little gem: "Wow, we have some exciting news! As a part of a series of actions to increase share value, the Board of Directors voted to decrease the number of outstanding shares. This means that they have approved a one-for-ten (1:10) reverse stock split effective August 30, 2002." The last I checked your stock was trading for $0.15 a share. That's 15 cents. Ouch.

Next, a Mr. T. Kornheiser writes, "Hey, what do you think you're you doing? You can't just copy this Q&A format from me. How about some attribution?"

Woops, sorry about that. However, I'm sure the format didn't originate with you. Also, I'm your only defender at Fool HQ and constantly sing your praises. Everyone here thinks you're not very funny. They say the same thing about me, though, so I feel we have a certain bond. As you well know, not everyone understands pure genius.

Finally, Mrs. J. Moore writes, "Thanks for visiting your father and me for Thanksgiving. But enough pleasantries, let's cut to the chase: Why is our stock worth less now than when we bought it?"

Oh, hi, Mom. First of all, you didn't buy a stock, you bought the S&P 500 index fund. Second, you bought it at the start of the bear market, so naturally it's down since then. However, you said you didn't need the money for at least five or 10 years, so I still think it will turn out to be a good investment for you, though there are certainly no guarantees.

Thanks again for the turkey, ham, cornbread dressing, giblet gravy, mashed potatoes, sweet potatoes, broccoli, cauliflower, cranberry sauce, and the pumpkin and pecan pies. It was well worth the trip.

Rex Moore contentedly watched both the Cowboys and Longhorns beat their archrivals over the holiday. As you can see on his profile page, he owns no companies mentioned in this column. The Motley Fool's disclosure policy is best enjoyed with whipped cream.