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Politics : Ask Michael Burke
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To: Glenn D. Rudolph who wrote (74779)1/28/2000 5:23:00 PM
From: Knighty Tin  Read Replies (1) of 132070
 
Glenn, I will give my opinion, though you will probably hear others as well. Last quarter MU had one of its few profitable quarters in the past 3 years and this quarter may also be profitable, albeit at a much lower level. Then we return to the old pattern of losses as the PC industry is being hurt. One of the first places the pc boxmakers have turned to cut costs is in the amount of DRAM provided to users. Since there is not any noticeable difference between a machine with 128MB and one with 64MB, at least not for the most common apps, they can cut back without very many people noticing.

At the same time, DRAM prices are collapsing, though they have occasional stutter steps upward.

The basic problem is that there is too much DRAM capacity. The industry goes through periods of capacity closings that raise the prices, but, then, they reopen and take the prices back down. What you have is something like the steel industry with very high PE ratios for no discernible reason.

I own long puts on MU and am very happy today. <g>
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