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To: re3 who wrote (2727)	7/9/2000 2:58:20 PM
From: chic_hearne	Respond to of 436258

Re: If IBM were to close below $100 for two weeks in a row, it would be a bad omen for the sector, and, therefore, for our summer rally. I'm not sure what's going on with IBM the stock right now. I follow the news quite closely and it all seems to be negative. There seems to be fears that IBM will not be able to grow revenue any more and that Lou has done all the financial engineering he can to maintain profit growth in the face of flat revenues. When I read comments from ANALysts like "wait to buy IBM until after Q2 earnings and guidance", I think they are accumulating while at the same time scaring others to sell so they can get in cheaper. In Q2 earnings IBM will very likely surprise to the upside because expectations are only flat in revenues. Hardware sales should be VERY strong, which will lead to ANALyst comments that IBM is making a comeback. 2H 1999 and 1H 2000 have been terrible, so it shouldn't be very difficult to show increased revenues and profits for the next 4 quarters. On top of that, Sun and the rest of the competitors servers are getting crushed in benchmarks for every type of application. It's only going to get worse when there's another process shrink to .18um on the POWER3 this fall and the POWER4 will be released mid next year. Either the ANALysts are very stupid and don't realize what is going on in the server market, or they know exactly what they are doing and driving the price down as they accumulate. I would not be surprised to see IBM have record hardware sales in one of its big server lines in Q2. In the end, I suspect many people are going to make a ton of money off of this scheme, including myself if my assumptions are correct. If the market is looking for IBM to lead things down, they may very well get burned come July 18ths earnings announcement.