What this means is that I can get three times the revenue of my competitors. The first egg covers all the overhead. Whereas my competitors can only make a reasonable return on their one-egg-a-day-chickens the second and third eggs from my chickens is pure profit. It is gravy.

Just like Microsoft, up until this year, I do not pay dividends and plow the money back into the business. My company "Counting Eggs Before They Hatch" has a great future because with these numbers it is obvious that, over time, I can dominate the market. If you take a forward view of ten years and the achievement of market dominance by then this offers an extraordinary investment opportunity, a growth opportunity.

CNN/Money has a write up on the past success of similar businesses. (See SPY and QQQQ)

SEC said to probe pension accounting

Report says six large companies may be manipulating fund returns to improperly boost earnings.
October 18, 2004: 7:02 AM EDT

NEW YORK (CNN/Money) - The Securities and Exchange Commission is looking into whether six large companies manipulated their assumptions about pension fund performance to affect their earnings, according to a published report.

Business Week reports that the SEC Enforcement Division sent letters to six companies earlier this month requesting documents, including e-mails between those who set assumptions, explaining how they arrived at their estimates. The article did not identify the six companies.

SEC officials told the magazine it had no evidence yet of wrongdoing, but they are concerned.

SEC Enforcement Director Stephen Cutler told Business Week his department is "looking to see whether managers are adjusting their assumptions with an eye to enhancing the earnings and balance-sheet numbers investors care about. That could be fraud."

Some companies assume returns of 9 percent or more on pension fund assets, which the magazine said experts and SEC officials believe is tough to justify.

The SEC Corporation Finance Division has been making general warnings for some time about using what it considered overly rosy pension assumptions, saying the regulators might challenge rate-of-return assumptions above 9 percent.

The magazine said companies report their projected earnings for their pension plans, not actual returns. It reported that if the assumed return on pension investments exceeds the pension cost, the company can count the surplus in its earnings even if real returns show a loss.

There is this nay sayer in California that is just a party pooper. He thinks this is all a bunch of hooey. He thinks that when public servants pick where to invest their money that they should bear the risk of whether they are buying the Brooklyn Bridge or the Bay Bridge. If the bridge is always covered by a curtain, sort of like the guy from Wizard of Oz, then we will never ever get to discover which bridge we have purchased. If we resell the curtain covered bridge to someone else then is it really important to reveal whether or not we, at one time, had owned a turkey?

Your government, and its public services, has been taken over the Three-Egg-A-Day-Chicken-Hawks. Details here . . .

State pension face-off
Assemblyman aims to KO current CalPERS plan, set up 401(k)s
By Harrison Sheppard
Sacramento Bureau

SACRAMENTO -- Alarmed by the spiraling cost of public pensions, Assemblyman Keith Richman, R-Granada Hills, plans to propose 401(k)-style retirement plans for public employees in California.

The measure is certain to face stiff resistance from members of the state's powerful public employee unions, who feel the current pension system, called a defined-benefit plan, provides better benefits than Richman's defined-contribution plan.

"Public pensions have been and are a very good deal," Richman acknowledged. "They're such a good deal that they're bankrupting lots of our governmental entities.

"By moving to defined-contribution pension plans like private workers (have), governmental agencies can save money, increase their budgeting predictability and not incur any new unfunded liabilities."

The California Public Employees Retirement System, one of the largest single pools of investor money in the world, manages almost $168 billion in assets and pays out $6 billion in pension benefits every year. But in recent years, the system has been a growing drag on the taxpayers, as it has dipped into the state general fund to make up for investment shortfalls in a weak market.

Psssst. Don't tell anyone that the chicken that lays three eggs a day is not real. Call it an assumption, and leave it at that. A white lie isn't a lie is it? If no one ever needs to find out, does it matter? Heck, we can even issue bonds and sell the bridges and egg farms to the unborn.

When the market was stronger, the liability ranged from zero to a few hundred million dollars. CalPERS officials say the liability should decrease in coming years as the system's investment portfolio has rebounded to double-digit returns.

Double-digit returns, three-egg-a-day-chickens, Pie-in-the-Sky. . . . . . .

I know, I know, we can just pass a law that says all egg laying chickens shall be defined as producing three eggs a day, that will fix everything -- now it is fact because the legislature agrees on a definition of an economic principle, and it is the law too. Therefore it must be true.