Semi-Equips - Buy when BLOOD is running in the streets! Message Board

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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets!

LRCX 142.62

+2.2%

Nov 21 9:30 AM EST

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To: John Dally who wrote (3583)	11/26/1997 8:25:00 PM
From: FJB	Read Replies (1) of 10921

John, Your bleak read of cap ex. plans for DRAM makers has already been discounted in the price of semi-equipment stocks IMHO. There is no doubt DRAM makers are selling at a loss if you include depreciation in the cost of production(excluding depreciation the marginal costs range from 2.50 to 4.50 for 16Mb). Nevertheless, semi-equipment spending will be up in '98. Not as much as it would have been pre-Asian crisis, but up. Some semi-equipment companies will grow very nicely. Here is an article concerning Korean Cap. Ex.(post meltdown). koreaherald.co.kr Although the Chaebols are reducing spending on the order of $Bs, I think semi capital goods will be one of the less effected areas because of the long-term strategic importance Korea places on this sector of the economy. You've got to pick your shorts very carefully in this sector. It doesn't make sense to me to short a stock after it has fallen 50% or more. Which companies do you think are still eligible for large downside moves or are you looking to catch a quick 5%-10% move down which I would agree is a good possibility? Bob

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