dg,
Ok the companys that are staying in dram have decided that they can and will make money in a commodity business. A business that is characterized by occasional boom cycles in the past but will remain a extremely low margin business in the forseeable future. To make money in this environment they will have to do "volume" therefore new fabs required. In order to do volume they will have to increase "market share" to increase market share they will have to lower price and decrease overhead and be able to sustain little or no profit(this means not making $ temporarily for strategic reasons) until the weaker competitors (like mu) fall behind thus "staying power$", stayin power$ also gives them the ability to keep up with latest and most effecient production and transitions to new products. Ultimately they are betting that there is $ to be made in dram under the right circumstances,some will win, some will lose, the competition is vicious. Mu has demonstrated that it does not have the "staying power$",and will be punished severely as reflected in their declining earnings and soon to be losses. This is now in the process of being transalated into a more realistic stock value but we still have along way to go down. My explanation has been a bit simplistic but I remember how many times Skeeter had to explain to you how and why lower asp were goming to effect mu's earnings, and I still don't think you got. Hope you understand this but I'm not holding my breath.
Check the replys I never said that you were crazy for selling puts however after reviewing the replys I can see that my comments to skeeter were based on my misunderstooding that you had written a put, my apologies, sorry, glad you made money on that, but I will agree that it is very risky and probably crazy to write puts on mu considering the pressure of both technical(ask larry) and fudamental forces converging to accelerate downward momentum on mu.
What ever happened to your long positions in the 36's.
What makes you think that puts are less risky then shorting mu. The question with mu is not if but when it will get down to the teens. this has been true for some months. If you had bought puts like many on this thread have you may have been stopped out by the time limits if you went short you would probably be in the $ as I am. By the way I went short at 37.5 for a day trade but decided to hold the position as I stated on this tread last week BEFORE the return to the mu downtrend, and I'm still holding. I will let you know when I get out. Gee now that is 4 points so far by going short(I wont' tell you my other mu short positions, don't want to brag). You on the other hand you made 7/8 with puts. I guess I must be doing something wrong. Golly if I keep doing this I'll never get to be "seasoned investor" like yourself. Good trading. RR
PS you still have'nt told me what the basis of your mu in the 40s by year end prediction is. |
