MB, I just can't help pointing out "expert fallacy" when I see it. Tell me someone, somewhere didn't hear John Murphy make that call and think "gee, if he said it, and he's the TA expert, well it must be true..." or something like that. It's their business, they can do whatever they want, but these people aren't gods or oracles.
I made a post yesterday here saying something to the effect that I think it would be interesting asking the MU strategists what it is they're thinking. I was trying to play out that interview in my head last night and here's one twist I'd like to throw out as food for thought (as well as a general sanity check <g>):
For the sake of argument, put any marginal cost analysis aside.
They're tied to the 16Mb's. CW has the transition accelerating when the 64Mb to 16Mb cost ratio for OEM's is roughly 4-1. 64Mb prices have been coming down. I'm not saying this is what they're thinking or it's even possible to do it, but what if part of the reasoning behind increasing output when the Asian players are reported to be shutting down the pipeline is to delay the transition? Does MU have enough of a presence in the 16Mb market in terms of production to affect the 16Mb price enough to prevent the 4-1 ratio from hitting?
Or am I just giving them too much credit in terms of general smarts and/or their ability to affect the 16Mb price?
And then maybe you bring the marginal cost curve back into play and maybe it comes out that somehow (?) it makes sense for them to boost output, and one of the byproducts is that it just so happens that the 4-1 ratio gets held off as a result, which works to their benefit?
Good trading,
Tom |
