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To: Bridge Player who wrote (23349)	4/24/2000 2:53:00 AM
From: Uncle Frank	Read Replies (1) \| Respond to of 54805

>> He did. By ripping the messenger. Guilty as charged, BP, but if you read through Ackerman's work, it is patently evident that he focuses on the sensational, and sometimes employs dubious logic to make his points. From his article on Cisco, Did you spot the yellow flag? Operating expenses are rising faster than any other item on the balance sheet, racking up year-over-year gains of 59.2% . In fact, these expenses are going up 41.1 % faster than operating income. If you take the time to examine the data he bases this on, you find that total operating expenses as a percent of revenue rose from 36.2% in Q3 to 37.7% in Q4. He has used an increase of 1.5% in operating expenses to project a disaster. He then writes, Cisco's workers generate less than $600,000 of revenue apiece. Considering the operating expenses, that amounts to a bottom-line loss of $150,000 per employee. Cisco has 21,000 employees, so if Ackerman is correct, Cisco would have lost over $3B in the last 12 months. In actuality, their net profit (ttm) was $2.553B. Let's examine another Ackerman comment: Cisco's share price is based entirely on expectations of continued growth in the company's revenues. It's a misplaced hope. IMO, his logic in support of this comment was shallow and specious. Cisco has a 5 year revenue cgr of 50.48%, and last quarter reported YoY revenue growth of 53.9%. The internet is not slowing, and Cisco's market share hasn't been slipping. I really didn't think Ackerman's article merited analysis, but I did it just for you <gg>. uf