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To: Amy J who wrote (123599)	12/22/2000 8:04:06 AM
From: GVTucker	Read Replies (1) \| Respond to of 186894

Amy, RE: stock options I have particularly seen over the past 6 months what might be called the "Cisco effect". Lots of venture capitalists have sold companies over the past couple of years to Cisco in exchange for stock. The attitude for a lot of them has been, basically, keep the stock while it is going up, but if it starts to go down, sell it. And over the past 6 months, a lot of them have been selling the stock. So while a pooling of interests was a highly efficient way for Cisco to build their business, it is coming back to bite them right now. BTW, I like your perspective right now on the market. The only reason we've seen such a sharp decline in the Nasdaq now is because we saw such a sharp rise in the year prior. Hopefully we've just corrected that imbalance. I think it is notable that the Dow and the S&P are far less than 20% of their respective highs. Things aren't falling apart. And they might not. The good news is that a whole host of people who thought they could make a ton of money without working at all are getting a harsh dose of reality. And going forward, there will be a healthy appreciation of risk in the markets.

To: Amy J who wrote (123599)	12/25/2000 1:38:46 AM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 186894

great info, Amy...I'm curious about this>> A $700k 3-bedroom house translates into $120k/yr base pay That seems a very high price for just 120K income. I always thought the rule of thumb for max home price was 3 times your salary, assuming you put 20 percent down. So 360K home for a person with 120K income, including a 60K down payment. What you're saying is double that. I am amazed that lenders approve such loans. Last time I applied for a mortgage some years ago, I had to show that the loan payment would not exceed 30 percent of income based on 2 yrs tax returns (self employed). As I recall, this 30 percent cap amount also included other installment debt such as car payments and perhaps credit card payments. This is in Texas, where perhaps lending criteria are stricter due to the real estate and S&L busts of the 80s. Under those terms, it is harder to buy more than you can afford. The problem with allowing a 120K salary to buy a 700k home is twofold (I think) * It is obviously an economic risk from a cash flow perspective (besides the fact that month to month disposable income is tight, if the person loses their job, they must find a new one quickly AND IT MUST PAY AT LEAST AS MUCH...perhaps not a lot to ask in boom times, but under cooler conditions, hmmmm) * The high price probably encourages asset inflation (of home prices), which seems to go on in the Valley. What are the typical criteria lenders in SV use in determining how much they'll lend?