Chas, Whittington just as I expected him!
"Pricing which has jumped of late in excess of $8 in the broker (spot) market provides impetus for contract prices well above $6 this fall. At$6, the only fully profitable producer is Micron. At $7, add Samsung. At $8, add Hyundai but not LG. At$9, add Siemens, Toshiba and NEC but not Hitachi, Mitsubishi or Fujitsu. Get the picture?"
You gotta love a guy who actively spits out condescending venom in his "research".
Well, sporto, I do get the picture.
However, that's like looking at the movie listings to find out what's on TV.
The goal of the business enterprise is not to loss less money than competitors or earn more money than competitors.
The goal of the business enterprise is to earn return on invested capital above the cost of capital.
A firm that continues to earn a return on invested capital below its cost of capital is detroying value.
Get the picture?
So my question for Whittington comes in two parts:
1) When will the spread between MU's ROIC and WACC turn positive?
2) What is your estimation of this period's duration?
I guess when you base everything on the accounting model those types of questions don't matter. The only thing that matters is earnings.
So, no, Whittington II, my friend, I get the picture alright. I get your picture and the pictures of your peers.
I guess I had expected those pictures to resemble Monet's, Manet's, and Cezanne's.
Unfortunatley, having seen a few over time, they seem to resemble those of the fluxus movement, in which certain bodily fluids are secreted and "worked" to produce art.
I want The Great Bathers and all I'm seeing is Piss Christ.
Good trading,
Tom |
