Sam, Another way to know if the downward revisions preview further damage is to talk to the analyst who made the revisions. I cannot do that, so I turn to you, the next best thing. Your answer makes sense.
Here's another one for you.
The main problem from Southeast Asia right now is this. Governments there implicitly or explicitly backed loans and banks and by implications the industries their loans went to, especially if presdident's brother-in-law happened to own companies in that sector.
Result: overcapacity. This has hammered large parts of the chip sector, and the auto industry, not to mention countless other areas. But what I don't know is this. To what extent has government support of bank lending caused overcapacity in the DD sector?
And if the answer is "a lot," what about this question: Are the brothers-in-law going to continue to fight it out and cut prices to try to eke something out of their bad investments? Or are they going to throw in the towel, close plants, relieve the overcapacity problem, and ease the price pressures that have hammered WDC and SEG, and made many participants in these threads squeal like little stuck pigs?
Happy Investing!
Vanni |
