RE: I am of the opinion that Jonathan Joseph, (and his relatively new assistant, who defended today's SSB report on CNBC), as well as Drew Peck, consistently spew misinformation"
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Jules, I am going to be a bit tough in my post to you because you are being very harsh with an individual who has done us all a favor by providing us valuable information - the type of information which was not provided to us back in 1999 by the analyst community (and should have been).
As an investor, I value information the most. Sure, I may not agree with the opinion around that information, but I value any analyst who does the leg-work to provide valuable information and has the guts to make a call that doesn't go with the pack.
Any analyst who has just provided us with some key information on tantalum capacitors and who has done the leg-work on tantalum capacitors gets my respect and thanks, since this is key and highly relevant information that was missing in the analyst community back in mid-1999 it appears. Let's not encourage a repeat of that.
Please tell me, since you do not like Jonathan's report, do you think tantalum capacitors are not plunging 50% in the last few weeks? Do you think Jonathan is wrong on this? Do you think the plunging tantalum prices do not put AMD at risk, as Jonathan pointed out? Isn't there a connection to TCs and AMD? Please answer this since these are Jonathan's points in his report, which you so criticized.
Note: the drop in tantalum prices coincided with the drop in AMD. Jonathan is the first semi analyst that I know that reported the drop in TCs.
Jules, not providing information is a worse evil than having a wrong opinion. I like information more than being upset if an opinion around that information is different than mine. I like how Jonathan provided that key piece of information on tantalum capacitors, which by the way, appeared to be lacking back in 1999 and had significant ramifications.
So, contrary to you, I greatly appreciate the fact that Jonathan is the only semi analyst that I know who has reported the recent declining prices in tantalum capacitors. He's done his leg-work on this, and I respect this a lot. Have you done your leg-work on this? Do you criticize an analyst for doing this leg-work? I appreciate that Jonathan did this and provided this information to us investors.
Note: separate out his opinion from the information he provides (which re: TCs is good).
For some history, let me remind you what happened in 1999.
Around August of 1999 the high-tech industry was being alerted to the potential of an imminent shortage in tantalum capacitors. The cautious high-tech folks started building up reserves of this part which cost only a few pennies back then. Others that ignored the alert got caught. The cautious ones started to build up inventory on other high risk parts too, since tantalums sometimes can be an indicator for other potential component shortages. Others ignored this too and got caught on more component shortages down the road.
In October of 1999, Intel reported that they weren't sure if they could keep up with demand - you could just hear it in Andy's voice (Mary's fav) during the CC (btw, where IS Mary C??? I really miss her posts and I wish she'd come back. Tony, any idea where Mary is?)
Until that Intel CC, it wasn't known the component shortage had spread to the PC industry too. Although, this wasn't too surprising since many of the parts are common to both sectors and some of the market drivers can be similar.
On one particular morning in October of 1999, about 4 hours prior to Dell's announcement, certain memory prices took a massive jump up - like a step function - and it was so unprecedented and so massive of a jump that the waves echoed quickly throughout the high-tech industry - the news spread fast - it was very exciting. That afternoon, Dell reported some issues with shortages. I seem to recall people on this thread had accused Dell of dishonesty about this. I took issue with that, just like I am now taking issue with folks criticizing Jonathan for providing us valuable information on TCs and for doing the leg-work --- leg-work which should and could have been done by the investment community back in ~August of 1999 (when TCs were showing initial signs of an immiment shortage).
Okay, now let's change topics. Let's discuss his opinion (which is a separate matter from the information he provided). Do I agree with his opinion?
I think since TCs have plunged, this indirectly puts AMD at a potential risk. However, I do not agree that the semi is seeing a peak. The decline in TCs does not necessarily mean demand is tapering off since TCs may decline for one of two reasons: a) original demand has dropped or b) too many suppliers have come on-line
For the report to be complete, I would need to see a discussion around this (did original demand fall, or did supply overly increase), not just a discussion around the declining prices - why the prices declined is key. (Maybe the report covered this?)
The issue could be simply that more TC suppliers came online - with TCs going from a few pennies to $1.00 that's nearly a 10X appreciation --- so you can bet more suppliers came rushing into this space --- so, the issue may be more with TCs, than components (like semis) across the board. I would need to know more (increase in # of suppliers & production, not just pricing information) before I could make a conclusion.
RE: "You would think these guys would ask themselves, "Would Intel be shelling out $6 billion on fabs, if they thought demand was slowing down?"
I said exactly the same thing. How can you ignore Intel as being a leading indicator for the semi industry? But then I read that Jonathan didn't say anything about Intel being negatively impacted. He had mentioned AMD being impacted (which makes sense).
RE: "I wish they would take Ben Franklin's advice, "It is better to remain silent and be thought a fool than to speak out and remove all doubt."
I won't be disrespectful to anyone who provides information and who does leg-work. I like to encourage this. Also, I prefer to read different people's opinions, rather than be blinded, like the industry was back in Q3-99 because everyone was following the pack -- just remember the shortage that took quite a few people by surprise back in 1999, because folks weren't doing their legwork or were following the pack.
RE: "I am therefore of the opinion that tomorrow we will reverse today's INTC losses"
I think TC drop impacts AMD, not really INTC.
RE: "hopefully, Joseph and Peck will loose the credibility with "The Street" that they so justly deserve to lose."
I continue to respect anyone who provides information, especially on TCs. I do not like how the media tore him apart for his report. They should have given him credit for providing this information. Did anyone else provide this information? So, let's separate out the information from the opinion. His information has great value. Also, his opinion has great value if you are an investor in AMD. If I were an AMD investor, I would track this TC stuff down and find out what's the underlying cause in the price drop - orig demand issues or too many new TC suppliers. Last year, USA headed to Mexico to get new TC suppliers online, and at 10X, I bet these new suppliers quickly got online and are in full production by now, resulting in the recent pricing pressures. Having said that, there are some indicators that some components aren't tight any more (like TCs), while others continue to remain tight, and meanwhile a different set of components recently got tight. It's a grab bag out there.
Regards,
Amy J |
