K, I told you I would let you know when I started nibbling on those former 'playing with matches stocks' <ggg>. In my 'buy it and sell if it makes a quick percentage move, otherwise pick up more on the way down account', I've started to build positions in JDSU below 6 and GLW just over 7 this past Friday. Terrible industry, blood in the streets, analysts have no clue as to when things will turn around, (some say maybe never, we are going back to the era of communicating via can and string <ggg>). One pretty sharp fellow by the name of Cary Salsberg who has appeared on the JDSU thread thinks it might get as low as 3, so who knows. I'm prepared to buy in a couple of additional installments if it goes lower. Speculative, but these issues will double quickly on any hints that things don't keep going downhill. Only question is, double from what level.. I also have my eye on EMC again, now that it is BELOW the level I bought it at on December 31st, and sold a couple days later 4 points higher... Fly in the ointment there is those pesky little rumors about 'sales irregularities... On another note,check this out on Enron, they really did try to get their fingers into everything...
Regards,
John
Consider how Enron's derivative activities distorted the market for memory chips and personal computers, almost on a whim. My colleague Fred Ramberg, a 20-year veteran of the semiconductor equipment industry who heads research at Fechtor Detwiler & Co. in Boston, reports that months before Enron's bankruptcy, the company began selling naked calls on dynamic random access memory chips known as DRAMs. By August, Enron Global Semiconductor Services was offering end-users "DRAM Price Risk Management" contracts with a $4 limit price for generic 128-megabit DRAMs.
An Enron slide show presented last August makes clear that trading derivatives, and not any particular commodity or product, was the company's real interest. An Enron official claims to have offered PC manufacturers like Dell and Compaq contracts to hedge the cost of buying DRAM chips. Dell denies doing any trades. Compaq confirms that it did talk with Enron, but also says no trades occurred. Several other DRAM manufacturers admitted to "talking" with Enron, says Ramberg.
There was a rise in DRAM prices in November and December, and many analysts think it was attributable to rising demand for memory chips. In turn, that may indicate a future rebound in PC stocks. But Ramberg believes the rebound in the DRAM prices was exaggerated by Enron's foray into trading memory chips. It may have been just a demonstration run for DRAM makers, but it moved the market. Moving the market, of course, is what speculation is all about. |
