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To: Chuzzlewit who wrote (85658)	12/16/1998 12:34:00 PM
From: jim kelley	Read Replies (1) \| Respond to of 176387

CTC, I believe another major problem for CPQ is their operational cost structure. Their operational costs are 23% currently. I do not see how they can get them down quickly enough. If they do they may have a cash flow crunch.

To: Chuzzlewit who wrote (85658)	12/16/1998 12:34:00 PM
From: AmericanVoter	Respond to of 176387

Chuzz, very good points ... now I know for sure that I am not going to buy CPQ and will resist the temptation as I see it moves higher... thanks amein

To: Chuzzlewit who wrote (85658)	12/16/1998 12:34:00 PM
From: Mohan Marette	Read Replies (2) \| Respond to of 176387

On trying to stretch the legs before sitting down. Paul: and the recent increase in dividend by CPQ won't help either,looks like somebody is trying to stretch the legs before sitting down so to speak. ============================================= Friday December 11 3:00 PM ET COMPAQ raises qtly dividend 33 percent HOUSTON (Reuters) - Compaq Computer Corp. (NYSE:CPQ - news), the world's biggest personal computer maker, has raised its quarterly dividend 33 percent, basing the move on its strong outlook for long-term growth. In a statement, the Houston company said it increased its quarterly dividend from $0.015 to $0.02 per common share. The dividend is payable on Jan. 20, 1999, to shareholders of record on Dec. 31, 1998.

To: Chuzzlewit who wrote (85658)	12/16/1998 12:47:00 PM
From: jbn3	Read Replies (3) \| Respond to of 176387

Hi Chuz, I had received a PM on my thoughts regarding general market conditions, and decided that they might be worth posting publicly, if only to generate discussion. If someone disagrees with me, that is fine. I encourage it, because it forces me to re-examine my position and try to defend it logically. It may also introduce new factors into my assessment. I welcome civil discourse and discussion of our stocks and their environment. Otherwise we are no more than air-heads waving pom-poms. (All due apologies to any air-heads who understand that.) However, I strongly object to *incivility* and *ad hominem* arguments. When emotions are on stage, logic didn't appear at the theater. I was asked, "If I may continue with your discussion on the market in general. Do you see corporate earnings and failing foreign economies as being the primary reasons for a downturn in the US market? " I see a number of things: 1. The market currently carries an all-time high price/earnings ratio. I find that understandable for some stocks, particularly techs, because of their demonstrated sales and earnings growth (DELL and CSCO, for instance) and potential. But I perceive a 'bleed' of expectations, the apparent thought process being that if one group of stocks has a high P/E, then other groups of traditionally good stocks should be able to carry high P/Es as well. 2. I think that High-tech has definitely improved corporate efficiency and earnings--and that it will continue to do so. But I don't think that we should assume or assign a continuous geometric progression to that efficiency, which is basically what some P/Es reflect. 3. I think that the world economic conditions have deteriorated badly over the past 2 years, particularly SE Asia, which will decrease US exports, notably finished goods. I do not think that recovery in SE Asia will be an overnight occurrence, though it WILL happen. 4. The impeachment hearings. I heard this morning that a lawmaker (Tom DeLay) had said that the President should not expect that Congress will allow him any military interventions during an impeachment process. (Did you notice the timing of Iraq's newest move?) The hearings make the US vulnerable to foreign ill-wishers. And if the President is impeached and removed, I cannot visualize that as positive on the markets. 5. Unemployment and consumer spending. I have seen a spate of major layoffs announced in the past few weeks. (Why do they always seem to come right before Christmas?) So I believe that qualified workers who have jobs will be earning good money. But I suspect that there will be some psychological carry-over in that group which will cause them to somewhat curtail their consuming. And obviously, the new unemployed won't be spending. The chain starts there... that will impact on housing prices and building, new vehicle sales, on services of all sorts, etc. 6. Christmas season. I have heard initial reports that Christmas spending is lower than expected at traditional malls and retail outlets, possibly because of increased on-line purchasing. Traditional retailers may have poor earnings reports. 7. This is the earnings warning season. Several biggies have already pre-announced. I think that expectations have become somewhat inflated, so expect to see more announcements. Check out the number of Analyst upgrades and downgrades. And I don't see anything happening world-wide which would exert an extremely positive effect on markets. 8. Y2K. I cannot guess what the effects, though temporary, will be on world-wide economies or corporate America. I cannot imagine a positive scenario, except for a few companies positioned to benefit (DELL might be one.) 9. The Treasury. I understand that the Treasury is printing and circulating a lot of money because they expect that large numbers of people worried about Y2K will withdraw and hoard money. Traditionally, large money is very inflationary, although if it is being hoarded, it may not affect the economy in traditional manner. 10. The market fundamentals (New Hi-New Lo and Gainer-Loser ratios) are terrible, but the actual picture is clouded by the internets. Oppenheimer just upgraded price projection on AMZN(?) to $400 this next year. INSANE, in my opinion. So we look at the market snapshot and see the NASDAQ down a point or two, but only because the internets are up 100 points and obscure the overall picture. 11. SI investors whose opinion and judgement I value have turned fairly negative. 12. More and more young people are investing. People who have no experience with serious down-turns, but have only experienced the growth of the last 10 years. If they ever face a serious reality check, who knows what will happen. Those are the main reasons I am expecting some backward movement, and why I am currently in very defensive positions, trying to protect what I have. (Covered calls on virtually all of my equities) On the other hand, there are still astronomical amounts of money flowing into retirement funds every month. The average citizen is becoming more and more savvy (or greedy), and is no longer satisfied with earning ~5% on a CD. And the market is basically still a supply-demand mechanism. The government is talking about putting Social Security funds into stock market equities: if that happens, "Look out, DOW 20,000" Just some thoughts. DELLish, 3.

To: Chuzzlewit who wrote (85658)	12/16/1998 2:05:00 PM
From: robbie	Read Replies (1) \| Respond to of 176387

Chuzzlewit - you guys are amazing. Kelley has stated flatly that he can't read Compaq's financial statements, and you state that you haven't studied Compaq near as closely as Kelley, yet both of you are making wild speculations about CPQ's operations, and giving Compaq investors tips on how to interpret their financial statements. Total arrogance. Your speculation also doesn't jibe with what analysts who study the company in great detail every day are discovering. Stick to what you know and if you do want to discuss Compaq, at least bring a fact or two to the table. Robbie