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To: gdichaz who wrote (8481)	5/22/1999 9:47:00 AM
From: Jenne	Read Replies (1) \| Respond to of 19700

FOOLS:Regarding another holding, if you haven't seen the new desktop computer Gateway (NYSE: GTW) is selling in Japan, check out this news.com article. It's essentially a PC packed inside the back of a 15-inch LCD monitor. It's basically a fat laptop on a stand. I can say that I wouldn't mind ditching the CRT monitor on my desk. Our techies treated me to a top-of-the-line monitor, but it's like having a big screen TV on my desktop. I was pleased to read in another news.com article yesterday that CEO and Chairman Ted Waitt "hinted that the company is eyeing ways to enter the market for information appliances." Waitt commented that they "...feel the technology now allows for us to develop very low-cost products and we are going to definitely play in that market." This matches my thesis on the direct PC companies that they contain multiple economic attributes, which account for their supernormal returns on capital: 1. They are precision manufacturers with service and logistics components. 2. They are distributors (second and third tier). 3. They are retailers. Manufacturing information appliances is a direct outgrowth of their core competencies and feeds into the second and third attributes, which are themselves growing.