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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: profile_14 who wrote (83810)	7/26/2000 10:35:06 PM
From: Captain Jack	Read Replies (1) \| Respond to of 97611

Pro-- that makes it a bit more clear. Some of these projects can get very expensive and take a long time until actually assisting the bottom line. Any company heavily into R&D will always have some failures also... just a business expense. <<"since Compaq is cash rich">> is a very big plus in cpq's favor as although they are not making any immediate gains on committed cash the expense is not compounded by borrowing costs.. Looks like the JDSU addition to the S&P cost nearly every issue today. Many issues were unloaded to make room for that very expensive issue to be purchased and put into the index... Possibly bad timing for cpq's move today??? Hell even GE sold off,,,,,,

To: profile_14 who wrote (83810)	7/26/2000 11:03:15 PM
From: Night Writer	Read Replies (1) \| Respond to of 97611

profile 14, I really understand the cash conversion cycle. Mostly from a product cost and inventory turnover stand point in a commodity market. Basically more sophisticated products like Wildfire cost and earn greater margins then commodity items like PCs. Many other factors also have to be taken into consideration. Among them the R&D cost and risk factor is higher then a PC. On the reward side, the product cycle should also be longer then the now short PC product cycle. Also high demand sophisticated products often develop an order backlog with deposits made on the product. Not a BTO situation, but it does help speed the recovery of up front R&D expenses. Also the ability to fund the upfront R&D expense and technical skills necessary to produce these products creates a competitive advantage in the market place. The cash conversion cycle comparison should be made on like products to be meaningful. I'll not touch on the product distribution differences tonight. I'll just ask you where you bought your last nice suit. Out of a catalog or at a store. NW