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To: PAL who wrote (10156)	4/10/1999 6:30:00 PM
From: Jenne	Respond to of 41369

In the Compaq Fallout, Looking for Winners By James J. Cramer 4/10/99 12:00 PM ET Look at it this way. At one point my partner, Jeff Berkowitz, thought World War III was about to break out in the Balkans. I don't care how many puts you have, you're not protected from that event. Still, the Compaq (CPQ:NYSE) news will cause a tremendous bout of handwringing about the true state of the personal computer business. I have my own theories about what is really going on. (You can take them with a grain of salt, given that I have puts on Compaq, or you can take them as visionary, because I have puts on Compaq.) First, Compaq, the Compaq we all know and love, left us years ago. This Compaq is a company without a soul that seems to be all things to all people. It pays for Digital Equipment and gets who knows what. It is buying Web companies. It has some search engine (AltaVista) through DEC that I thought was worth a lot, but maybe now that is wrong. It is the higher-cost maker of computers. It is not well-run. Second, people love cheap appliance-like personal computers. People want fast Web access. They don't want all of the other gizmos that come in a $2,000 machine. Compaq has too many high-end machines. Third, corporate America and maybe corporate Europe bought a ton of personal computers to get Y2K-compliant last year. Looks like that buying has been done. These problems are all peculiar to that subset of tech which is personal computers. They do not extend to the Web, or to networking, or to bandwidth, the prevailing themes that were working in the market. They do extend to semiconductors, disk drives and adapter cards. One could argue that Compaq's statement means a price war that will stimulate sales. But to whom will those profits accrue? Maybe only Microsoft (MSFT:Nasdaq), which makes good money per every computer sold. For me, it will be business as usual. For example, I hope they take Cisco (CSCO:Nasdaq), which I am long, down on this. I want them to take America Online (AOL:NYSE) down on this. They aren't losers because of this, and they may end up to be winners. Forgive me for being a pollyanna, but I am trying to make money