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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 76.21

+0.1%

3:59 PM EST

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To: Yaacov who wrote (47311)	1/26/2001 2:17:54 PM
From: Stock Farmer	Read Replies (3) of 77400

Yaacov - PMCS is component supplier. Their orders choking. Who's not ordering? CSCO. Market interprets this as bad for CSCO. In ordinary circumstances, this would be a rational view. However, in this case I think over panic. Look at CSCO's recent 10Q and see the tremendous raw materials inventory buildup (they got spanked for this, remember?). In contrast, the gradual growth in finished goods and work in progress no longer stood out like a sore thumb. But come time for CSCO's next Q, they need to take the inventory backlog off the books... not suprising end of Q the orders to suppliers dry up. My take: PCMS got shaken like a flea as a consequence of CSCO supply management decisions (CSCO probably not alone, just biggest). Imagine... me defending CSCO's price. Don't get me wrong, I still think the price is high, but I think the reaction in this case is for the wrong reasons ;) John.

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