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Technology Stocks : LSI Corporation
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To: Beachbumm who wrote (18838)6/12/1999 1:08:00 PM
From: Jock Hutchinson  Read Replies (2) of 25814
 
The FPGA/PLD v ASSP debate has been eloquently addressed numerous times on this thread, and it will be a lot of fun watching this battle unfold during what is now being conceded as the next upcycle in semis. The market will only care about one thing--revenue growth rate and its accompanying earnings per share growth rate.

But long-term, there is a real difference between the two products. In my opinion, the Alteras of the world offer much greater risk simply because they have less overall intellectual property in their product than the LSIs of the world. I believe that that gap is widening rather than lessening, and that Altera represents more of a niche or interim play in the semi market rather than a sustainable investment. Obviously INTC is the godfather of sustainabilty.

A more extreme example is VTSS. People have gotten filthy rich on the stock over the past four yeas. But it's essentially one kind of chip, and from what I understand the advantages of using "Gas" chips could evaporate within the next three years, because upcoming technology will supplant these chips.

And that to me is what makes investing/speculating in technology so much fun. You can have a company that fills a critical niche for four years, and become filthy rich. Yet if you hold out for one more year, you are back to ordering Big Macs and Shamrock Shakes at the walk up counter. (SEE IOM and GEMS).

I mean take a look at these two charts and try to handicap a winner based on past performance:

techstocks.com

techstocks.com
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