Trey, you wrote: "all the above i can forgive, but the statements regarding our armchair qbacking of mr. appleton is unforgivable. a first year business student could outperform him. he should not be in the position he is in. if he is doing such a good job, why has the stock dropped from 60?"
Let me reverse the question: If MU is doing such a bad job, why is MU still in business? I'd venture to guess that MU is currently the most profitable DRAM company in the world, because I doubt any others are profitable at all.
Clearly MU is the world's low cost producer of 16MB DRAMs, just as they were the world's low cost producer of 4MB DRAMs a year ago. When the situation arises that 64MB chips become more profitable than 16MB chips it is reasonable to conclude that MU will be the world's low cost producer of 64MB DRAMs. People on this thread a year ago ridiculed MU for still making 4MB DRAMs, just as they now no doubt think that MU can't make 64MB chips. But let's be honest, the competition has gone to 64MB not because the 64 MB chips are more profitable, but because they can't compete with MU at the lower density. When MU moves to 64MB, where will they go? 256MB?
This is a business where the low cost producer will win in the end. Other companies may stay in business for awhile with the support of their goverments, but sooner or later the low cost producer will win when the economy of the competition reaches a state that they can no longer keep funding a money sink-pit.
That said, is MU a buy? Well, I don't own any, nor am I short. I usually don't take a position, though I went long at 32 on their previous run up, but sold at 40. I shorted them at the top, but covered after making about 3 points. Oh well. I am currently comtemplated buying them at some point, but I am not there yet.
In any case, I am not advocating buying them, nor selling them. I am just arguing that the only reason they are still in business in this extremely competitive business (without government support) is that they are one of the best run businesses I know of. When it comes to cutting costs and being the low-cost producer, no one is better, and therefore it will be difficult or impossible for foreign competition to put them out of business.
Good luck, with your investments (or shorts),
Carl |
