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Technology Stocks : Tower Semiconductor

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To: David Kelly who wrote (1849)	2/26/2000 4:28:00 PM
From: Creditman	Read Replies (1) of 1853

David, Is your question "Why won't Tower repeat its past pattern?" What past pattern? Tower was a smallish ASIC fab outfit owned mostly by DSSI who milked it for dividends when DSSI needed cash. DSSI could not supply much capital and the chip business needs lots of capital for new plant and technology and uses lots of cash for R&D. The stock was in the $20s and $30s when Tower announced that they would not be profitable while the company was re-designed to offer the new technologies we now know as MicroFlash and the CMOS sensor stuff. As funds and lots of investors need profits each and every quarter, they sold the stock down to $5 something in late 1997. I first bought in at $6 ..I am still buying. I invested because I had heard Tower management on CNBC one time and was impressed. I am a "bottom fisher" by nature anyway and as a credit manager I was very impressed with Tower's financial strength and as a credit manager formerly in the ASICs business I was also impressed by the business plans and overall quality of the operation. It took two years; a year longer than I had bargained for but I am glad ... super glad I bought Tower. My margined account has gone up at least 600% in the two+ years. I have made out real well on Tower covered calls I have sold on a part of my holdings. I recommended Tower to friends and family ..they listened to me because of my background and some of those people are really ... no kidding REALLY RICH now so I get to be a hero. Not a bad position to be in. Tower now, why am I still buying? I think Tower is still playing catch up. The stock should be at $50 or so at least just based on what semis have done the past 2 years while Tower was "sleeping". The new exciting feature is the Offer family ownership (money, brains and power!) and the apparent tremendous capabilities of the flash which is even beter than I had hoped for. I am conservative. I still sell calls on half or so of my new purchases as a sort of hedge but I have looked hard and I cannot find a better opportunity where I can invest new money and make as much as fast as I expect to with Tower. Maybe some IPOs or .Coms will move up quicker but I know how chips work and I will bet my money on Tower becuase it is still a steal at $25, will be profitable soon, has first class management, a solid balance sheet and the kind of technology (Saifun) that is in short supply in the world. How the chip industry performs as a whole counts too but Tower will outperform. You asked my opinion ..OK?

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