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To: Carl R. who wrote (42345)	1/18/1999 9:50:00 AM
From: Thomas G. Busillo	Read Replies (3) \| Respond to of 53903

Carl, I agree. But this Niles thing is driving me nuts. I can understand making a mistake. I'm human too, I make mistakes. And if the mistake occurred because he was given data that wasn't exactly clearly labeled, fine. That I understand. What's driving me nuts at this point isn't the mistake, it's how it wasn't caught. I signed up for the research trial at E*Trade and got his report. He includes two pages entitled "revenues and earnings model". The first is basically an income statement and the second is a more detailed sales and costs breakdown. The first few lines of that breakdown look roughly like this: Q1 Q2 Q3 Q4 Q1 Q2E Q3E Q4E DRAM shipments Nov Feb May Aug Nov Feb May Aug... 16MB - Units (Mil) ASP Rev ($ mil) 64Mb - Units (Mil) ASP Rev ($ mil) Total DRAM bytes (Mil) Sequential Growth Y/Y Growth ----------------------- He uses the words "DRAM shipments" in the column heading. So, it's reasonable to conclude that the line item "sequential growth" under "total DRAM bytes" = Sequential growth in total DRAM bytes shipped. Since he also puts an "E" in his column headings for upcoming periods, this implies the data presented in the columns not noted as such are "actuals". So if it later comes out that megabits shipped declined 10% on a sequential basis... ...how can one release a model stating "7%" for sequential growth last Q? How one can put down a number of 7% for sequential total DRAM shipments on a model labeled "current version 12-23-98" in a column that a reader would reasonably construe as actuals without picking up on the fact that something somewhere is wrong? We're 17 percentage points off on the issue of total megabits shipped... ...but everything else adds up? What kind of model is that? The very last row on that page is EPS. So somehow, Niles can believe that MU's shipments increased 7% sequentially, when the 10-Q says they declined 10%, and still be able to have his model come out with a loss of .19/share. He gives a breakdown of 16Mb's v. 64Mb's. So how does MU ship the number of 16Mb and 64Mb units he thinks they did, when he's saying the total memory shipped is +7% more when they actually shipped -10%? If there's a 17 pt. swing between what he thinks they shipped and what they actually shipped, how does everything add up in his model? How could no red flags have gone up? Good trading, Tom