David, I know the Q ends in August. In fact, that's my point. What's easier to forecast, a Q that ends in a week or FY00 or FY01.
As far as DRAM prices being all over the place and averaging out in his mind, I will repeat Joseph's statement from the 6/24 document:
We believe prices will continue trending downward this quarter and have trimmed our Q4 ASP estimate for 64Mb DRAM from $5.25 to $4.50. We are also trimming our fiscal 2000 average price from $5.00 to $4.50."
His 4.50 average ASP was based on the assumption that "prices will continue trending downward this quarter". They haven't.
You know it. I know it. More importantly, he knows it. He knows it because he's only written 8 subsequent MU-specific reports most of which lay out recent pricing right out of the gate in almost every one. In addition, the man publishes a weekly survey of chip prices. (If you want, I could attempt to construct a "what was John Joseph thinking" timeline by sifting through both groups of docs; and you know I feel strongly enough about this type of crap to do it <g>)
So I have a tough time believing that the man is in some kind of addled state in which he is miraculously able to perform enough number crunching to come up with higher and higher FY estimates and price targets and yet cannot RAISE his Q499 number (that would be the obvious implication).
Or is it a case of on "the Jupiter effect" - defined in the Handbook of Sell-Side Analyst Tricks (1999 Edition) as follows:
a bizarre theoretical alignment of hidden numbers and unstated assumptions allowing the analyst in question to keep certain numbers constant (or to progress in set increments) in spite of the agreement amongst reasonable observers that key data points driving the number have in fact changed.
IF ASP's have risen from 6/24 to 8/24, and John Joseph and his handlers at SSB really believe in the -.20 number then what's changed? Lower units? Lower than anticipated unit cost reduction? Increased operating expenses? Production glitches? MUEI?
So basically, other than the upside of increased prices, there's this hidden unstated downside off-setting the good stuff. Right?
And strangely, on 7/9 the net upside and net downside just happened to align themselves to come up with -.20?
And once again, we have the Jupiter Effect occurring on 7/13 in re Q499. Whatever ASP upside existed, was amazingly offset by an equal downside leading to -.20?
And once again, we have the Jupiter Effect occurring on 7/14 in re Q499. Whatever ASP upside existed was amazingly offset by an equal downside leading to -.20?
And once again, we have the Jupiter Effect occurring on 7/27 in re Q499. Whatever ASP upside existed was amazingly offset by an equal downside leading to -.20?
And once again, we have the Jupiter Effect occurring on 8/6 in re Q499. Whatever ASP upside existed was amazingly offset by an equal downside leading to -.20?
And once again, we have the Jupiter Effect occurring on 8/12 in re Q499. Whatever ASP upside existed was amazingly offset by an equal downside leading to -.20?
And once again, we have the Jupiter Effect occurring on 8/17 in re Q499. Whatever ASP upside existed was amazingly offset by an equal downside leading to -.20?
And once again, we have the Jupiter Effect occurring on 8/24 in re Q499. Whatever ASP upside existed was amazingly offset by an equal downside leading to -.20?
Sorry, but that's patently ridiculous.
Good trading,
Tom |
