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Technology Stocks : Semi Equipment Analysis

SOXX 316.33

+1.3%

Dec 10 4:00 PM EST

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To: The Ox who wrote (6241)	10/17/2002 1:23:32 PM
From: Kirk ©	of 95546

what happened is very easy to explain and I seldom hear it on the news. The companies in tech were making predictions on numbers that were from a house of cards called WorldCon and the other telecom companies that were cooking their books by swapping bandwidth. Cisco would see the growth, assume that the accountants made sure that the revenue was real revenue, and then they extrapolated the growth to plan on how many routers to build and how many cities to build to put the workers to build these routers. Then the chip companies like ALTR and XLNX would see the growth and project their earnings to supply chips for those routers. Fiber companies sprang like weeds to supply even more bandwidth to meet the growth. AMAT would hire workers to build the capital equipment to sell to Taiwan to build those chips to put in those routers to sell to those crooks at WorldCon and Global Crossing... Then Carly over at HP saw that all these people being hired at AMAT, XLNK and CSCO would need PCs on their desks and perhaps a printer so she boldly said "20% growth" where HP had never done 20% for any long period before... Then someone found out the numbers were a fraud and the house of cards has collapsed. There is flat or negative growth as people buy the nearly new stuff on the liquidation market. There is now a ton of capacity that the lower true growth is working through. Some think it will be 2003 for PCs to come back and early 2004 for fiber and networking growth to resume as the capacity will only then be filled. Until then, we try to buy the companies that will survive. Kirk

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