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To: Yaacov who wrote (18417)	3/14/1998 10:30:00 PM
From: Brian Malloy	Read Replies (1) \| Respond to of 27012

Found this update from Jubak on the MSFT site ref CPQ and INTC et. al. Updates New Developments on Past Columns The Blue-Chip Safety Premium Six months. That's how long it will take to work out the inventory problems now savaging the stocks of PC makers like Compaq (CPQ) and the companies like Intel (INTC) that supply the guts of these machines. Last year, when Intel's chip sales slowed, analysts, investors and Intel management all blamed inventory reductions at indirect computer vendors such as Compaq that had announced plans to become more like direct vendor Dell (DELL). Dell, which builds a machine only when a customer orders it from the company, keeps very little inventory on hand -- equal to about a week of sales right now. Compaq, Hewlett - Packard (HWP), IBM (IBM) and other companies had inventories at their own plants equal to a month or more. Inventory equal to another two months of sales or so sat at resellers. It turns out that while the indirect vendors talked the talk last year, they didn't all walk the walk. Compaq seems to have made the least progress in the group. The company announced plans to cut inventory to three weeks of sales, but repeatedly missed internal targets. Inventory at Compaq now stands at near 10 weeks, or about four weeks at the company and another six weeks in the resale channel. Analysts expect that it will take Compaq at least six more months to hit its inventory targets. (IBM and Hewlett-Packard are thought to be in better shape.) That means sluggish orders for components such as Intel processors and Seagate (SEG) or Western Digital (WDC) hard drives until inventory levels reach their targets -- even though PC sales (in units) seem on track to grow by a solid 15% this year.

To: Yaacov who wrote (18417)	3/15/1998 4:37:00 PM
From: Sonny McWilliams	Read Replies (1) \| Respond to of 27012

Yaacov. There is only so much money to be a leader to everyone. Maybe if the Europeans would pay for it? CPQ. I did not lose any money on CPQ. I actually made some on it. I suddenly had this bad feeling, after the CFO made that speech a week before the plunge about January being competitive, and decided to sell all my CPQ at 33 3/4. I lost some of my gains by buying 400 shares back at 29 3/4. I guess it was a little too soon. I am watching CPQ very carefully because I will buy all the rest of my CPQ back as soon as I feel a bit more comfortable with it. I know it will be there for us. I had the same feeling with CPQ when it could not stay in the 90s but I kept it. Why don't you drive up to Hannover this week and clue us in on CeBit. gg. Mot and Seiman. I have never heard of Seiman. So I have no opinion. What is it? A wireless company? Sonny