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Strategies & Market Trends : Steve's Channelling Thread -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (14544)	4/16/2001 9:08:27 PM
From: Logain Ablar	Respond to of 30051

Hi Zeev: 1) We need to fix the system. Had to wait 40 minutes today to mail one little envelope. Either the IRS or the postal service or both need to change a little. News media really screwed up here in CT again. Had many clients calling on why they had to file today and I had to point out they are filing in Pittsburg vs. Andover. Here is one for you I had a client asking why MA celebrated a day for the Patriots. I had to explain it had to do with Paul and the midnight ride and not the football team. 2) Inventory write off. Its valued @ lower of cost or market so CSCO is saying it is worthless. Hey haven't read to much lately so who knows. good luck out there. Tim

To: Zeev Hed who wrote (14544)	4/16/2001 10:32:16 PM
From: ajtj99	Read Replies (1) \| Respond to of 30051

Zeev, the inventory numbers could also possibly include returns from customers who are unable to pay their bills. It could also possibly include buy-backs of equipment that was previously installed, but obsolete. I'm just grabbing at straws. Those would be small numbers and quantities. Most likely they took in huge amounts of inventory in the 1st quarter and now find that unless they can create a Beanie Baby type market for switches and routers, they'll be looking at most of that inventory a year from now year at the present rate of sales. Much of it will be obsolete and sold at fire-sale prices, IMO.

To: Zeev Hed who wrote (14544)	4/16/2001 11:14:22 PM
From: Sam	Read Replies (1) \| Respond to of 30051

<<By the way, can someone explain to me how CSCO can write off "all their inventory", they left the January quarter with about $2.25 B of inventories, if memory serve and now they are going to write off about that amount.>> Just a few days ago, someone claimed that Jabil had enough inventory for the rest of the year for many of their products. Jabil does a lot of work for Cisco. So does Flextronics. And, I believe, Solectron. It wouldn't surprise me if Cisco wasn't on top of all that inventory until recently. There have been a lot of questions about who was going to get stuck with all that inventory, the ECMs who produced/assembled it or the OEMs who ordered it. Those questions weren't urgent as long as everything was getting sold. Suddenly they have become very, very urgent. I'm guessing that some very difficult negotiations have been going on over the past couple of months trying to sort things out to see who will take the hit, and CSCO's writeoff is one result of those negotiations. I would look for some writeoffs from the ECMs in the coming months as well. For the first time in about three years I am now totally out of the ECMs. It was a nice ride while it lasted, even a great ride. I hope to have another one, but will wait for awhile before reentering. It may well be possible to reenter at or near my previous cost in the single digits later in the year. Maybe Mr. Pink is right. We'll have to see. Sam