Larry. One more point about trading commodities is the importance of inventory. For example, look at oil at 28 dollars today. There is plenty of oil but OPEC drove inventory levels down to a point that makes people nervous so they must buy to make sure they have the oil they need. There is no shortage, just an inventory function that is VERY sensitive about a critical point. Same goes for DRAMs. If inventory levels drop to a sufficient number, even if there is plenty of DRAM, prices of DRAM get strong. The real question is to guess that inventory level I guess. I sure don't know how, and I doubt if that analyst does either.
Another complete unknown is what PC demand in Europe and Asia will be. In one scenerio, growth is really blasting off, with demand in Japan even finally coming back to the good old days. In another scenerio, Japan recovery falters, China has problems, etc. Who knows? I sure don't and neither does that analyst.
Next, what about Windows 2000? How much incremental DRAM will that be? Who knows, ...... It is astounding how many people think they know the answers to questions like this, but all of us know such speculation is usually a lot of hot air.
Finally, what about Sony PS2 and Rambus memory? I have not seen a single projection for what the PS2 will do, given it can be configured with LINUS and open up a whole new set of consumers that need cheaper internet access / entertainment devices.
I think DRAMs and oil have a lot in common. |
