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To: unclewest who wrote (4014)	10/12/2000 9:24:27 PM
From: Uncle Frank	Read Replies (1) \| Respond to of 10713

>> cree has mentioned declining margins in the last 2... ... very much like Cisco does every quarter. Considering the strong ties between the two companies, it's not surprising that ntap has adopted that cautionary boiler plate. uf

To: unclewest who wrote (4014)	10/13/2000 7:31:44 AM
From: Jim Oravetz	Read Replies (1) \| Respond to of 10713

Ahh, yes, the old balancing act between funding an expansion that will increase sales and spending "too" much such that it effects the profits margin. Sounds to me like this announcement is more of a legal cover our b _ _ _ statement than really something to be overly concerned about. A recent article in II mag (Oct '00) covered the topic of how previously very successful fund managers had suddenly had to deal with lousy returns. The bottom line was adapting their investment "formula" to some more "up to date" version. One manager who changed his style was Jim Craig of the Janus Fund. Thier stock picking lead them to avoid stocks with P/E's higher than the growth rates. This worked much of the early 90's, but began to cool. "Craig and Blaine Rollins noticed that they were bypassing many top companies disqualified by the high p/e's. In some cases, these stocks fell outside the guidelines because they were investing heavily in their business, a process that temporarily depresses earnings but often results in better margins down the road - precisely the sort of companies the fund should have been buying, Craig concluded." One other manager who modified his mantra was Bill Miller of Legg Mason Value Fund. "Miller wasn't always a fan of technology stocks. Like many value managers, he was reluctant to invest in companies whose future earning growth was uncertain. ....Miller ultimately decided to change his approach. He traces his conversion to research done by W. Brian Arthur, a former Stanford professor who concluded that many technologies exhibit "increasing returns" -- companies that are ahead in the market tend to increase their lead. This meant that as time went on, chipmaker Intel and software giant Microsoft were likely to enjoy progressively greater returns. And even though consumer multinationals like Gillette and Coca-Cola might dominate markets, they would never command the huge market shares enjoyed by Intel and Microsoft." Sounds like a winner here. Go CREE! Jim