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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Lee Lichterman III who wrote (35261)	12/16/1999 12:13:00 AM
From: Dwight E. Karlsen	Read Replies (1) \| Respond to of 99985

I know that restatement of earnings for prior quarters is usually hard for investors to swallow, but in this case, I can actually see why investors don't seem real concerned: 1) The adjustments are supposedly only related to acquisitions. I may be mistaken, but to me that means those "one time charges" that appear every quarter. Therefore, earnings before one time charges would not be restated. And since investors have always discarded the one time charges as irrelevant, then prior period adjustments of one time charges would be disregarded, also. 2) Cisco has probably the best reputation of all tech companies for being straight shooters with analysts wrt what's happening in their company fundamentally. I think the average analyst probably believes that Cisco would never allow any material errors to go undetected quarter after quarter. 3) The blurb I saw had Cisco saying (in their 10-Q filing) that the restatements were the result of the SEC essentially applying rules in ways that are more rigorous than Cisco accountants deemed regular and acceptable. 4) If the Cisco auditors resign tomorrow, then obviously that changes things. A whole lotta things. -g- I personally view the predictions of earnings not increasing as much as they have in recent quarters as a bigger negative than the stuff about the SEC rules on acquisitions. Considering Cisco's valuation using old-era metrics, I would expect Cisco to underperform the market for the next few months.

To: Lee Lichterman III who wrote (35261)	12/16/1999 12:27:00 AM
From: Stephen	Respond to of 99985

Lee, I messaged CNBC after they reported for the 7th time that the 'potential future slow down of revenue' statement was a bog standard clause CSCO had previously included. I pointed out that it was not the only concern in the qtrly filing ... it was just the headline (I guess no one looks past the headline anymore ?). I have been telling family & friends for over 2 years about CSCO's accounting practices and their need to continually acquire companies to maintain growth by doing excessive one time charges ... I feel rather relieved that at least there is something in print now that shows I am not loopy just because I actually look at the numbers behind the headlines. Happily ... of course, my wife and friends have ignored me and maintained their holdings. However, I find it frustrating that I am out of sync with the market as, this aside, I am always way too early in spotting things ... and I have actually stopped shorting stocks as it was costing me money ... even though I have eventually been proved right. The bottom line is ..... for me to successfully trade, I must first turn off my brain .... Stephen

To: Lee Lichterman III who wrote (35261)	12/16/1999 12:36:00 AM
From: Andy H	Read Replies (1) \| Respond to of 99985

The "restatement" risk factor is boilerplate and identical to that used in prior filings by CSCO. I used to write these things for a living and can tell you that in this case, the risk factor is not news. The way to bury a real risk factor that is actually present and not just hypothetical for legal protection is to put a more specific sentence in the middle of the boilerplate risk factor. For example, if CSCO had a real concern, it would mention the specific issue and what the possible adjustments could be somewhere in that risk factor discussion. This CSCO story this morning just showed how incompetent CNN-FN must be to hype PURE boilerplate risk factor language apparently without reviewing prior filings or consulting someone who is knowledgeable about SEC filings and risk factor disclosure. I wonder if CNN-FN is smart enough to realize what a foolish position they took on this matter this morning. Thank goodness Yahoo has the M,D and A discussions immediately accessible. I was able to compare the disclosures word for word, side by side, with two browsers open long before the open this morning. Impossible to do that pre-internet!