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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: FR1 who wrote (46314)	1/15/2002 1:26:32 AM
From: Keith Feral	Read Replies (1) \| Respond to of 65232

1) Response to issue # 1. I would never buy anything on-line because it is impossible to return. I buy things to test them out and see if I like them, especially technology products. The thought of not being able to return equipment to Circuit City is absurd. No one in their right mind would buy a CSCO router on EBAY. The technology obsolescence is another good issue. CSCO's monumnetal write-off for invesntory last Spring cleared the deck for obsolescent equipment that is now being sold on EBAY. What a joke. 2) Goodwill from pooling of interests can now be written off in a single quarter. Look at what JDSU and AOL have done in their most recent EPS reports. AOL made a $60 billion correction in goodwill. CSCO could make another monster write-off for goodwill if it serves the mutual interest. CSCO could make any size write off and not spend a freakin nickel of the 19 billion they have sitting in cash. Wouldn't it be beautiful if companies like CSCO could reduce a proportionate # of shares to reflect the size of the writeoff? Say CSCO made a $60 billion write off to reduce goodwill against the pooling of interests they generate. Why not let them automatically retire 3 billion shares of stock at $20. It would help generate higher EPS's for current shareholders to reflect the reduction in discounted cash flow of non performing assets. The tech wreck is over now that the companies have been allowed to write off 50 years of non performance in a single quarter. It was in everyone's interest to let them write off the goodwill - the alternative was to watch a 10 year drought of corporate profits as companies generated billions of revenues and charged it back against their goodwill. The corporate tax rate for all technology companies would have gone from 34% to 0% based on the complete lack of available profits. Even Congress figured that one out pretty quickly. I must say this is the biggest silver lining for the tech recovery. The problem with this kind of satirical journalism is that it only psyches out the people that were dumb enough to buy the flip side of the mania 24 months ago when companies like CSCO were trading at $75.