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Technology Stocks : LSI Corporation
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To: sea_biscuit who wrote (19658)8/9/1999 8:36:00 PM
From: Ram Seetharaman  Read Replies (2) of 25814
 
Dipy - We know that it hit the bottom in Fall 1998. Let us assume that LSI will peak (let us say 9-2001) at $ 100 (if it doesn't split by then). That is our up ramp for the cycle from 9-98 till 9-2001. Then the down cycle begins till another bottom. So you want to be a buyer when it hits the bottom or almost bottom!. You want to sell when it peaks or start shorting then. Before the downward trend begins, we will see several signs of distress in the market, either in the form rising/high interest rates, or lethargic demand, or excess capacity or recession in the economy or an Asian crisis or even a LSI product obsolesense, a better competetitor's product etc. to name a few. So in that light, it is predictable or foreseeable, though not exactly (i.e day 1997 to day 2001). Technical stock analysis will also help - quite notable being analytical Fair value Models like that of S & P (When a stock reaches its full fair value, price appreciation beyond that point will be minimal!). All this is assuming that no one buys LSI or LSI goes out on a buying binge to survive and expand after the slowdown (you probably heard of the LSI/VLSI merger or buyout last Fall - that eventually didn't pan out - Philips got VLSI this year!). So LSI on its own will only appreciate to a point. That will be its cycle peak from the $ 12 bottom of last Fall. You want to get out within about 10 % from such a precipice or if lucky get out exactly at the precipice. There are some analysts who think LSI at $ 55 is already there (they are dead wrong because there is lot of room left in the semi/chip expansion for the next two years). Thus any steep peak in late 2000 or mid 2001 should be warning signs to get out!
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