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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (51986)	4/21/2001 7:01:17 PM
From: TobagoJack	Respond to of 77397

Hi mindmeld, investors, in the aggregate, sometimes, are smarter than we give them credit for, because collectively, they also make huge mistakes. It is also possible that investors will view future CSCO P/L statements with a silent question mark that can not be cleared by looking into the balance sheets. All analysts of average and higher intelligence (there are, by definition, some) will be digging into the issue of "Mr Chambers, just how much of written off inventory was sold this quarter?" Transparency in accounting is important and will become more so once market reforms are instituted and congressional hearings over. Yes, this is the script we are following now, along with the lawyers frenzying. CSCO's brilliance changes not one iota in their free cash flow over time and only exposes it to charges of chicanery, and, legal fees. Of course, CSCO does not give a hoot, because of the general weakness of moral character in this sinners bubble market, populated by the Larry Ellisons and Jeff Bezos. I will stay with my 2001 low for CSCO at USD 8, adjusting for and splits or reverse splits. Chugs, Jay

To: RetiredNow who wrote (51986)	4/21/2001 10:14:05 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 77397

Well, I would categorize all of your questions as purely rhetorical, because you know the answers as well as I do that is not the case. e.g., it is unknown whether the 2.5 billion of "worthless" parts will be used. and if used, it is unknown how and even if such will be expensed. e.g., even if they take a charge against pro forma for such use, it may be the case that they elect to expense a depreciated amount as opposed to charging full book (i.e., book prior to the writeoff). one can imagine some degree of leeway. imagine this scenario. i have a computer company. i have 1 million in inventory of computer parts. i write them off. i then decide i can use them, 3 months later. at this time, the market value of the parts is, say 900K. but, i decide to book expenses of only 500K, under the rationale that the parts are already "semi-used" (i.e., contaminated by delivery to a customer such as myself), and therefore do not deserve full market expense. this provides an extra 400K of gross margin, vs. my buying new parts at market for 900K. Nifty! one can extrapolate from the above example that the depreciation factor i apply to goods which have a market will have a significant impact on my "profitability". What we all really want to know is how will this affect earnings going forward? The answer to that is it can only be beneficial i must disagree. i would say that properly, it should only be neutral--not beneficial or adverse. it may be appropriate to use some parts, and if they are properly expensed, i have no problem with this, but i still consider it worse than a hypothetical scenario where they did not overpurchase by 2.5 billion (said monies being a real cash expense, not to mention said expenditures being indicative of not having a proper, er, grasp of market conditions which is somewhat out of keeping with the Masters of the Universe portrayal sometimes bandied about)... The move was legal and brilliant Legal? OK. But Brilliant? They admit they paid 2.5 billion dollars for that which is "worthless" and you call said admission brilliant??? So here's another question for you? Do you want to profit from that knowledge or not? What knowledge??? what is there that every tom, dick and harry does not know? i don't see any edge here.