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Author: Chapman208 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 9251  
Subject: IBM FAQs V1.6, Part 2 Date: 10/9/2001 4:16 PM
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Frequently Asked Questions: IBM Corporation -- V1.6, February 2, 2001
Part 2


Mark T. Chapman

Due to the length of this document it has been divided into two parts.

Part 2:
1) IBM's Analyst Ratings and Financials
2) Buying IBM Now vs. Later
3) IBM's Patent Portfolio
4) IBM Warranty Information
5) Where to buy IBM products
6) IBM Online Knowledgebase
7) IBM as a Corporate Citizen
8) IBM Stock Split History
9) IBM Chairman's Remarks
10) Other IBM Stockholder Questions
11) How Stock Splits Work
12) Historical Stock Quotes
13) DRiPs and DSPs
14) Acronyms and Abbreviations
15) How to copy and paste text into a message
16) How to post a table of numbers to a message board without messing up the columns
17) How to emphasize message text using italics or boldface

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1) IBM's Analyst Ratings and Financials
For current analyst ratings, EPS numbers, and last five quarterly earnings history, go to: http://biz.yahoo.com/z/a/i/ibm.html

For the most recent Income Statement, Balance Sheet, and Cash Flow statement, refer to: http://biz.yahoo.com/fin/l/i/ibm.html.

For IBM insider trading info, see: http://biz.yahoo.com/t/i/ibm.html.
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2) Buying IBM Now vs. Later
A common question is "Should I buy IBM now, or wait until later?" The answer, of course, as with many investment questions, is "it depends."

No one knows what the stock market will do tomorrow, let alone next week. If IBM announces spectacular earnings next quarter the stock will likely skyrocket. But if earnings are lukewarm, the stock may dive. On the other hand, if the Fed raises interest rates again the market as a whole may drop. However, if inflation numbers are low and the Fed decides to hold off on raising rates the market may take off.

So, what happens if IBM's numbers are good, but the market is having a bad spell? Or, if IBM's numbers are so-so, but the market is having a great month? These things all interrelate, and one can boost the other or counteract it.

No one can (or at least, you shouldn't allow them to) tell you when to invest, or in which securities. You have to make up your own mind on those issues. If you think IBM has a rosy future, and the market looks strong, then you should probably buy now, because the stock will likely go up from there. However, if you think IBM may have a rocky quarter or two ahead, or you think the market is in for a correction or recession, you might want to wait a few months before putting your money in IBM (or perhaps any stock). Or you might split the difference and invest some now, and hold onto the rest for a few months to see how it all works out. It's entirely up to you.
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3) IBM's Patent Portfolio
IBM has led the world in US patents received for the last 8 years in a row. This press release talks about some of the 2000 patents received: http://www.ibm.com/Press/prnews.nsf/jan/33331B969B56D7AD852569D00073EFD4. According to the release, IBM's patent portfolio accounts for over $1 billion per year in patent and intellectual property licenses.

The press release discussing IBM's 1999 patents can be found at:
http://www.ibm.com/Press/prnews.nsf/jan/0E8FBD7E6AC8D12E85256863005A3D4C.

The press release discussing IBM's 1998 patents can be found at:
http://www.ibm.com/Press/prnews.nsf/jan/6E897902E509F243852566F600505932. It's still worth reading, as it contains a lot of interesting material.

(For more information about U.S. patents in general, go to the IBM Patent Server at http://www.patents.ibm.com/ibm.html. This server lets you access over 26 years of U.S. Patent & Trademark Office (USPTO) patent descriptions as well as the last seventeen years of images.)
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4) IBM Warranty Information
For warranty information on IBM products, go to http://www.pc.ibm.com/support. Select the product you need information on, then on the right side of the screen, under the "Important Information" heading, select "Limited Warranty/Warranty Service Upgrade Information."

For other warranty and service info, call the HelpCenter at 800-772-2227 in the U.S., or go to http://www.pc.ibm.com/qtechinfo/YAST-3P2QYL.html for a list of HelpCenter phone numbers for other countries.
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5) Where to buy IBM products
For information, or to purchase IBM products in the U.S., go to: http://commerce.www.ibm.com/content/home/en_US/home_840.html or call 1-888-411-1WEB.

To find an IBM authorized dealer in the U.S.: http://www-1.ibm.com/partnerworld/pwhome.nsf/whv/locator.html.

Outside the U.S.: http://commerce.www.ibm.com/cgi-bin/ncommerce/ExecMacro/country.d2w/report?lang=en_US&cntry=840.

6) IBM Online Knowledgebase
Should you run into a problem with your IBM hardware, IBM has an online knowledgebase containing problem diagnostic procedures, links to device drivers and other information. The knowledgebase is called the IBM Online Assistant, and can be found on the "Support @ IBM" home page at http://www.pc.ibm.com/support, using the Online Assistant link at the left. (You can also get to it directly at: http://www.pc.ibm.com/support?lang=en_US&page=help&subpage=online_assistant).

(To use it you must first "profile", by telling the Online Assistant the kind(s) of hardware you are using. The Online Assistant uses this information to pre-answer some of the questions in the diagnostic procedures, reducing the number of questions you are asked.) Just FYI, I helped design and develop the IBM PC, Aptiva, and ThinkPad portions of this knowledgebase during 1997-1998. Of course, it has been expanded and enhanced since then.
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7) IBM as a Corporate Citizen
In the March/April 2000 issue of Business Ethics magazine, IBM was ranked #1 on the list of the Top 100 Best Corporate Citizens (http://www.business-ethics.com/the100.htm#100 Best Story).

The October 2000 issue of Working Mother magazine honored IBM as one of the 10 most progressive companies "at helping working moms balance their careers with the rest of their lives". IBM has been among the Top Ten for 13 consecutive years--longer than any other company--and in the top 100 all 15 years the list has been compiled (http://www.workingwoman.com:80/wwn/wwn_driver.showpage?area=30&content=4085).

Many investors prefer to look for companies who make efforts to benefit their community and society at large, rather than those companies that seek to exploit the public by polluting, producing dangerous products, running sweatshops, and the like.

Big business often is seen as an enemy of the environment, and while this is often the case, IBM proves that exceptions do exist. IBM's record in pollution avoidance, recycling, and energy conservation is enviable. For a summary, see: http://www.ibm.com/ibm/environment/annual98/system.phtml (be sure to use the drop-down links at the bottom of the page to see the remaining sections of the report). Also, see the article on how IBM is helping to reduce industry Perfluorinated Compounds (PFC) emissions (a "greenhouse gas"): http://www.chips.ibm.com/micronews/vol4_no1/hines.html.

For a report on IBM's ergonomic product design principles, go to: http://www.pcco.ibm.com/ww/healthycomputing/ergoenvi.html.

IBM also takes its social responsibilities seriously. IBM is involved in many projects to help the needy, improve education, and assist the disabled. Here are some of the activities IBM has been involved in over the last few years:

+ IBM and United Way launched the IBM KidSmart Early Learning Program (http://www.pcco.ibm.com/ww/healthycomputing/ergoenvi.html)
+ IBM donated a S/390 mainframe to Northern Illinois Univ. for the creation of a Knowledge Center (http://www.ibm.com/press/prnews.nsf/Searchvw/8cd112bf6c6f90638525687a00677bc7).
+ IBM and Arkenstone released software to help people with Dyslexia: (http://www.ibm.com/press/prnews.nsf/Searchvw/83b3ffecf6d038b08525662b0062caf1). Over the years IBM has released a number of products designed specifically for those with disabilities, including ScreenReader (for the blind); various voice command and dictation products (for the blind and those unable to use a keyboard) such as IBM ViaVoice; IBM ThinkAble (for the mentally impaired); and others.
+ Each year IBM donates several million dollars to the United Way (and promotes a charitable contribution campaign that generates millions more from IBM employees).
+ IBM researchers are making advances in the field of medical technology, such as helping the paralyzed to walk (http://www.ibm.com/news/2000/03/231.phtml).
+ For other examples of IBM community service, go to: http://www.ibm.com/ibm/ibmgives/grant/helping/.
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8) IBM's Stock Split History
To find out when all of IBM's stock splits have occurred, all the way back to 1964 go to: http://quote.yahoo.com/q?s=IBM&d=mys. This chart also shows IBM's stock price growth since 1964, as compared to the S&P 500. If you need to go back farther (to 1925), or want more details, see: http://www.ibm.com/investor/financials/irfiss.phtml.
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9) IBM Chairman's Remarks
Chairman Lou Gerstner addressed the Commonwealth Club on October 12, 2000, and discussed education: http://www.ibm.com/lvg/10.phtml.

Mr. Gerstner briefed securities analysts on May 9, 2000. Here is a transcript of his remarks: http://www.ibm.com/lvg/09.phtml.

To read, or watch, Gerstner's remarks at the 2000 annual stockholder's meeting (April 25, 2000), go to: http://www.ibm.com/news/events/annual00/.

For Gerstner's remarks at Finance Conference 2000 (March 6, 2000), see: http://www.ibm.com/news/2000/03/06.phtml.

To see a list of Gerstner's speeches back to 1995, go to: http://www.ibm.com/lvg/speeches.phtml.

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10) Other IBM Stockholder Questions
If you have other questions about IBM stock (how to replace lost stock certificates, what is backup withholding, etc), go to the IBM Stockholder Relations web page at http://www.ibm.com/investor/services/irsefa.phtml.

11) How Stock Splits Work
Here is an excellent explanation of stock splits in general, written by Mark Hirschey:
http://boards.fool.com/Message.asp?id=1060151006647000&sort=id.

Conventional wisdom holds that splits are essentially non-events. If you order a pizza cut into 16 pieces instead of the usual 8 the cost of the pizza is no more than before (despite having twice as many slices), because the per-slice price is half of what it was). Likewise, owning twice as many shares of stock as before (for half the price per share) doesn't directly affect the total value of your investment (although announcing the split often has the effect of running up the price, at least temporarily).

Nevertheless, there are a number of advantages to stock splits, as I explain in this post:
http://boards.fool.com/Message.asp?id=1190244001061000&sort=id.

Perhaps the most common question about splits is, "When do I have to buy shares to take advantage of the split?" The answer is "Anytime up until the moment the stock splits." Think about it. If you had to own a stock a month before the split date to take advantage of the split, no one would buy during that month-long pre-split period. Yet you see people buying all the time. So obviously this isn't a problem.

Another common question is, "When will the next split occur?" The answer? "No one knows for sure." Until such time as a split is announced by the company, anything else is sheer speculation. Some companies, like IBM, tend to have their splits the same month each time (because the stockholders have to vote on the split at the annual meeting), but even in this situation splits don't necessarily happen every year (IBM's last two splits were in 1999 and 1997; before that the previous split was in 1979!). Other companies tend to split at about the same price each time, regardless of the date. Some companies like to keep their stock price low, to appeal to the masses, while others prefer to keep the price relatively high, to denote quality. A stodgy stock could suddenly rise rapidly on unexpectedly good news, while a skyrocketing stock can suddenly cool off based on market conditions. Either of which can change plans to announce a split, either sooner or later than "usual." So, to sum up, "Ya never know…."

If you use The Motley Fool's portfolio to track your investments, here is a link explaining how to adjust your portfolio for the split: http://boards.fool.com/Message.asp?id=1190244001227000&sort=id (then press the Next button to read the following message, with one additional step). If you are keeping track manually, a 2-for-1 split means that you divide the purchase price in half, and double the number of shares you have. For a 3-2 split, multiply the price by 3, then divide by 2 (or multiply by .667), and multiply the number of shares by 1.5. If you end up with a fractional share (such as 22.5), typically the company will give you cash for the .5 shares, leaving you with 22 whole shares (unless the shares are held in a Dividend Re-Investment Plan, or DRIP, where fractional shares are allowed).

For other questions/information about stock splits, refer to the Stock Splits board on TMF: http://boards.fool.com/Messages.asp?id=1030057000000000.
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12) Historical Stock Quotes
If you want to look up the price of IBM or any other stock traded in the U.S., for a given date or date range, go to: http://chart.yahoo.com/d.
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13) DRIPs and DSPs
If you are an IBM employee, you probably already know that you have access to a Direct Stock Purchase (DSP) plan and a Dividend Re-Investment Plan (DRIP) via payroll deduction. Non-employees can also participate in an IBM DSP/DRIP. The details can be found at: http://www3.netstockdirect.com/nsdasp/DetailLevel2.asp?QCompanyNo=15495&Sym=IBM. The minimum investment to fund this account is $500, with a $50/month minimum commitment thereafter.

For more on DRIPs/DSPs, check out these sites: http://www.moneypaper.com and http://www.dripinvestor.com

There is an alternative for those who wish to take advantage of the same kind of ability to invest money in small amounts, or regular increments, that don't necessarily add up to whole shares, or who don't have the initial $500: a service that mimics a DSP/DRIP plan. Instead of an investor individually buying fractional shares of a stock, all investors buying the same stock have their money pooled, so that large blocks of stock are purchased at once by the plan. This means lower purchase/sales costs than for a traditional DRIP/DSP.

The advantage of a pseudo-DRIP/DSP, or "DRIP service provider" is that rather than having to buy, say 5 or 10 whole shares of IBM (at perhaps $120/shr) through a broker, or starting with $500 via a traditional DSP/DRIP, you can send a pseudo-DRIP a flat amount, such as $20-$100 each week or month, and they will buy whatever fractions of a share of IBM (and/or other stocks) your money will allow. The entry amount to open an account is lower than a DRIP/DSP, the minimum incremental investment amount is lower, and the purchase/sales fees are lower. Like a traditional DRIP/DSP, by buying shares constantly throughout the year you average out the high and low prices, a process called "dollar cost-averaging", ensuring that you don't plunk down a large amount of money at the all-time high price.

Here is a brief write-up of how such a plan works: http://www.buyandhold.com/strategy/index.html#control.

On the other hand, there are some disadvantages to this sort of investing (both traditional and pseudo-DRIP/DSP plans): 1) The fees may be low per-purchase, but as a percentage of your (small incremental) investment they may be much higher than from a traditional online discount broker (if you saved up your money and invested a few hundred dollars at a time instead of $20-$100). 2) These plans purchase/sell at a set time (once or twice a day, or just once or twice a month, in some cases); you don't get to specify a time or price. So they may buy right before the stock takes a nosedive, or sell just before it takes off, and you have no say in the matter. 3) If the plan only sells once a week or twice a month, it may be two weeks or more before you see your money. If you need it right away this could be a problem. 4) When it comes time to sell 100 shares in 20 years, you will have to dig up all the records of the .23, .19, .07, etc., shares you bought each week or month that add up to exactly 100 shares, and figure out your total cost for those shares. This can be a huge pain (I have been through it).

If you are still interested in investigating DRIP service providers, here are a few to choose from:
http://www.netstockdirect.com, http://www.buyandhold.com, and http://www.stockbuilder.com.
In addition, some stockbrokers will also let you reinvest dividends of stocks held in your brokerage accounts.

For more on DRIP/DSP investing in general, refer to: http://www.fool.com/school/Drips.htm, http://www.fool.com/School/13Steps/StepFive.htm, and http://www.fool.com/FoolFAQ/FoolFAQ0015.htm.
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14) Acronyms and Abbreviations
The computer industry is rife with incomprehensible acronyms and abbreviations. Have you ever wondered what RAM, PCI, IDE, and JPEG stood for? To help you decipher them here are a couple of links to sites that specialize in that sort of thing: http://www.whatis.com/ and http://www.ucc.ie/info/net/acronyms/acro.html.

From an investment standpoint, here are links to some glossaries of investing terms: http://www.financialweb.com/community/fwu/glossary.asp and http://www.vanguard.com/educ/glossary/glossintro.html.
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15) How to copy and paste text into a message
Highlight with your mouse the text you wish to copy (i.e., hold down the left mouse button while moving it over the text). Next, press Ctrl+C to copy the text, then position the pointer in the message where you want to paste the text. Finally, press Ctrl+V (or Shift+Insert) to paste the text. Because the C and V keys are adjacent, you may find that using Shift+Insert (instead of Ctrl+V) reduces the opportunity for pressing the wrong key.
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16) How to post a table of numbers to a message board without messing up the columns
There are two ways. You can click the "Table Data" button when submitting a post, and the whole post will be presented in a fixed-width font. (Note: If you do this, be sure to use the Enter key at the end of each typed line, or each paragraph will become one extremely long line!)

Or, you can put just part of the post in a fixed-width font by typing:

<x>This part of the post will be in fixed-width font</x> (Use PRE, for "preformatted", in place of the x.)

This can also be combined with bold and italics (see below). For example:

Company Purch Price Sales Price
IBM $50.00 $120.00
ABC 37.50 42.75
JKL 25.00 35.00
XYZ 57.25 52.50

Note: It is always a good idea to use the "Preview" button to see how your message will look before using the "Submit" button to send it.
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17) How to emphasize message text using italics or boldface
Use the same format as in the previous topic, except instead of "PRE" use "b" for bold, and "i" for italics (without the quotes) inside the < and > symbols.
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I hope you find this useful. I'll update these FAQs periodically. Please let me know if you find any expired links, or other problems.

Mark.

To go to Part 1 of the IBM FAQs, press the Prev link (at the top and bottom of this post).

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