Replies to post #45115 on Savvy Trades and Investments

[SSKILLZ1]

WSTL (Intangible Assets)

I get that we strongly disagree I hate amortization as I continue to say it is a distortion of the facts, if that asset is truely worth 0 and by the way customer relationships don't disappear a lot of times so we are amortizing something that will continue for years to come in a lot of cases, they don't just buy a company and then soon after that company produces no more sales that they acquired after a certain date.

Think about this if your a food company and you buy another food company what are we amortizing there is not gonna be some ground breaking technology that changes it's usefulness, and something like wstl updates there product lines all the time wilth new one that is filtered through the income statement with a thing called r & d expense. There is no place for amortization in my opinion. Every industry when you acquire something is amortized to a certain extent, and quite frankly some of it just doesn't make a lot of sense, I mean wstl has perhaps one of the most aggressive write down policies I have ever seen I mean they are writing down 1 million a quarter and there is only 12 million left. So that is another issue I have with it some companies amortize at seem a faster pace than others. It just makes no sense we are writing down and assets to me that when I look at the balance sheet do you calculate book value or do you calculate tangible book value Like I do, if you do that what in the world does amortization expense have to do with it. Depreciation is a real expense because after a certain period of time that equipment is gonna need to be replaced and new equipment is gonna need to be bought, we are not buying new customer relationships, or new backlog, we get them by simply conducting new business. I could keep going, it is something I am very passionate about the only thing I will say after the fact is it does make sense only on a drug company because there is a patent, and a time to measure it, but amortizing customer relationships or backlogs is weak that is say there is gonna be no deals in the future from that, and that is simply not true and if you arguement is that new product lines will replace old ones I agree with you, we call that being expensed mostly by r &d expense in my opinion.