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To: larry who wrote (19980)	4/7/2001 4:27:47 PM
From: t2	Read Replies (2) \| Respond to of 24042

As far as stock option goes, I totally agree with you and have pointed out lots of times in the past that employees will eventually ask for higher compensation, and thus making it harder and harder for companies to show greater bottom line growth in a bear market. larry, I would disagree with assertion. New employees may now agree to more in stock options, recognizing that the company stock may be at lows. They will just remember to not go for options when the stocks recover. Once the market rebounds, I believe many employees will cash in options and leave for other companies seeking more in pay and less in options. The short cycle from 1998 to now has taught people a lot of things about stock options. Buy low and get out at highs is how many new employees will see. The corporate human resources departments should be able to convince new applicants of the benefits to getting stock options in bad economic times. Existing employees have fewer opportunities to leave as the job market gets weaker. They can't do anything about losses in their employee stock options due to market declines. I believe company pay increases will also be put on hold. The announcement by Agilent for accross the board 10% wage cuts may be what is about to happen..also expecting to see wage freezes also. The old employees will be happy with a low cost strike price for new employee options as a reward for enduring the bad times in the near term. Agree on SUNW and EMC. EMC looks better than SUNW though. BTW--still waiting for major share repurchase announcements from the corporations. That is a big factor along with better visibility that will help the market. The more companies announce buy back plans, the greater the confidence investors will have to buy.

To: larry who wrote (19980)	4/7/2001 5:14:27 PM
From: Blacksmith	Read Replies (2) \| Respond to of 24042

As far as stock option goes, I totally agree with you and have pointed out lots of times in the past that employees will eventually ask for higher compensation, and thus making it harder and harder for companies to show greater bottom line growth in a bear market. I hate to disagree with you, as you have been right on the money calling the market. However, I have seen some lessening of demand in the high-tech sector, and think salaries will grow slowly even without the value of stock options. Although this is hard to measure, one unambiguous number is the starting salaries for new graduates. I predict that salaries for new electrical engineering graduates next year will be less than this years salaries adjusted for inflation. Most likely, salaries will not increase even on an absolute scale.