Tad:
LOL, especially the ex-wife, and off-shore experiences. Someday, we'll trade war stories,....have a "Worrell 1000" under my belt,... (and an early one at that) (g)
Your views on MU's technology "followership" as opposed to leadership are similar to my own,
Re: "capex spending -.... nuclear winter of last summer,....",.... also agree. I see the current move up in equipment spending as a bit of a yawn. I also see the memory yield ramps as MORE than able to meet the demand needs for the foreseeable future.
What is new to the equation for me over this past two years, has been the more-than-perceptible saturating of the PC marketplace. This is something none of us have had to deal with in forecasting. Another new factor is the collapse of more than half the world's economies, which subtracts most of their respective populations from the ranks of those who might be prospective PC purchasers. Even worse, there are no new applications,....very new to the equation. Finally, a market that has ceased to "discount" and that disregards deteriorating fundamentals, sure is new to me.
Aside from being "new", all of these factors are negative for memory "profits". When one adds this to the fact that most memory producers hump plenty of debt and rarely (if ever) produce free cash flow, they represent excellent targets for bearish perspectives as far as I am concerned.
Looking further out, it's difficult to envision how North America escapes being bruised or worse by the spreading deflationary wave. I personally believe that this is more important than the actual PC/semi situation, particularly with stock prices in La-La Land, and large percentages of the population playing the markets via their Omega "Trade Stations". Most of the stats. paint an unfolding disaster (trade imbalance, current account deficit, a planet papered in treasuries and greenbacks, the manufacturing sector shrinking, record consumer debt that depends on stock prices for its continuance, lousy savings rate, etc.)
Hard for me to be bullish about anything in the face of this, so I'll stay a bear. I particularly like the staggering narrowness of the current market. (g)
Best, Earlie |
