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Technology Stocks : FSII - The Worst is Over?
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To: Donald Wennerstrom who wrote (2040)6/29/1998 12:46:00 PM
From: Joe Dancy  Read Replies (1) of 2754
 
You may be right Don with your comment that "it will be quite awhile before there will be any positive movement in FSII."

On the other hand I think we will begin to see some consolidation in the industry here - it makes sense as costs go higher and higher - and like the oil or auto industry we may end up with the "Seven Sisters" or "Big Three" equipment manufacturers. So many companies are selling at or below book value.

FSII would fit in there somewhere as an acquisition by one of the big guys. So I think the bad news is out, the stock price should stabilize, and we just wait for better times.

I was reading "The Essays of Warren Buffett" by a law professor at Cardozo Law School - and Buffett noted that you make money by buying when Mr. Market is irrational, giving away viable businesses for much less than intrinsic value. Buffett also noted that a great management cannot do much in an industry that is sinking (example: textiles in the US). I wish I could quote his exact words, the book is at my office. He also noted that studies have shown that acquirers usually pay to much for the acquired, which is a boon to shareholders of the acquired company.

Well, I think this is an industry that will do well longer term, FSII has good products and management, and the market's short term take is not positive (in part due to short term institutional money) while longer term intrinsic value is there.

In any event, better times await us somewhere in the future IMO.

Joe
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