MAG-IT Surplus Surplus Inventory for the Industrial Chemical Community www.magitsurplus.com Best if viewed at 800 x 600 screen resolution

The stock markets have continued their yawing in the 10,500 to 11,500 range of the Dow 30 industrials, with a 500 point loss in the Dow 30 during the week of 9/20/99. Interestingly, the technology heavy NASDAQ lost significantly more in terms of %. Several companies have warned that earnings will NOT meet analysts expectations, and the sell-off was on. Even the Microsoft folks have publicly expressed concern about the excessively high stock valuations, including their own. Pick up a copy of any good financial periodical or browse one of the financial sites on the Internet and compare the P/E ratios of Microsoft, Yahoo! and e-bay to GM, IBM and Duke Power. Historically, P/E ratios of the "industrial" sector ran from 14 to 17; anything above 20 is considered "high" and reflective of higher risk by traditional standards.

While you're at it look at the P/E ratios of some chemical stocks, like DuPont, Dow and others. Most chemical stocks have been hurt by the sell-off. Many have low to very low P/E ratios but remain in strong financial condition despite the overall soft market for chemicals. We suspect there is a buying opportunity in our sector.

Have you noticed how we have become dependent on technology, especially telecommunications and computers? How did we ever get along without fax machines, copiers and computers? Our recent phone problems really got us thinking about this. We think we'll call a "net meeting" to discuss our dependence on technology! <Grin>

Are you Y2K ready? - While we in the US have anticipated this event and prepared for it, many developing nations have not. The likely push-pull effect will be a flight to dollars (the "blue chip" currency in International finance) while the countries do everything they can to prop up their currency and prevent a currency drain. Watch for more news on this phenomenon.

A dramatic increase in dangerously aggressive driving has been noted over the past two years. It seems that 15 to 20 MPH over the posted speed limit is unacceptable, and a six inch opening is sufficient to warrant a lane change. Safe intervals between vehicles in the same lane have dropped to under four feet at 55 MPH and above, significantly less than four feet in 35 MPH zones. We expect violent and fatal crashes to increase until something is done. Driving the speed limit will get you the finger; maybe even shot. Wave, smile and let them go on their way, it's not worth the confrontation.
Maybe this is just another symptom of what we'll refer to as "Millennium Mania".

The trade deficit widened considerably adding to market fears, rising to record levels. Consumer spending also remains strong while unemployment remains low. The dollar is falling relative to other currencies, especially the Yen. These factors are being watched by the Fed, who is in turn being watched by the financial markets. A number of other economic statistics are out this week (as this is being written) any one of which might trigger a wild ride in the financial markets. Stay tuned.

What does this mean over the short-term for your business? The recent Fed move of a quarter of a point was, in part, to stem rising inflation early in order to maintain steady growth. The most recent economic statistics have made the market jittery, and it appears the market is discounting for another move in rates by the Fed. Certainly, working capital loan rates will continue to rise due to the Fed rate move. You can reduce your working capital loan costs by reducing your dead inventory, overstock and surplus, turning the inventory into cash. This will reduce your loan requirements and interest burdens and increase cash flow. Remember, that surplus inventory on the floor is consuming your cash flow. Call us or visit our web site at Available and send us a description of your list of dead, surplus or obsolete inventory.

In an environment of soft prices and rising materials costs it is even more important to save money on raw materials. Remember, the most leveraged area to save on costs, and thus increase profit, is on the materials purchased side of operations. Even spot buys of small quantities can add to the bottom line. We have in stock many materials in good to excellent condition, often in sealed drums, ready to ship to meet your requirements. Many of these materials are on-spec, but simply are aged or labeled with the name of a company which has been acquired, was in warehouse stock at the time of the change and/or was packaged with the acquired company's color scheme. Chem-Find can be relied upon to provide quality surplus chemicals priced as low as pennies on a dollar! See our current mailer at Wanted and our current physical inventory list at www.thechemfinder.com to see what we have in our current offerings.