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Technology Stocks : LSI Corporation

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To: E. Graphs who wrote (15031)	9/16/1998 4:15:00 AM
From: shane forbes	Read Replies (2) of 25814

E: Re: I always cringe when the press comes out with negative comments on any area.........if it's communications, LSI hangs out with them, so off to jail....if it's consumer electronics, off to jail.........even DRAM and PC related stuff takes LSI down........guilty just cuz. (1) Rational Reason number 1: LSI produces relatively few products (I will hazard a guess - less than 300?) that they are very susceptible to tiny reductions in demand. (By way of contrast I think BBRC does around 250 million in revenue and produces around 1200 parts - LSI does 1,300 million in revenue and produces maybe 250 different kinds of chips (WAG). Which of the 2 is more susceptible in any weakness in any sector? Come to think of it there is another reason - LSI can't get new customers the way a BBRC can say by convincing say a MLIN customer that they have a better substitute for a MLIN chip. See: burr-brown.com ) So basically LSI has a few expensive chips going to a few customers and is schrewed big time if those orders go poof. So they are big time extremely vulnerable. (2)Psyche reason 1: There are very few people who truly think LSI has any shot near term at any given time during any given season in any given year. So if they invest in semis and happen to have LSI in their portfolio at any sign of danger in the overall semi market out goes LSI from their portfolios! Sector rotation out of the weakest stocks first! Same reason why AMAT held on so long when all around them they brethren kept plummeting (I bet some of the people who sold the weaker semi-equips did not sell AMAT. But I bet if there was a sign of trouble someone who had say LRCX and AMAT in their portfolio at the same time would without a doubt pull the trigger on LRCX first. My sense is the same thing happens for LSI in any semi portfolio.) (3) Psyche big picture Disgust Reason: LSI has a lot of promise but no earnings to show for it and enough of people have learnt that by now and so look to dispense with their LSI position post haste... (4) Cynical picture: No one understands what the company does! and could care less since the stock just keeps going backwards <g> As to "the coma or the slipping into one" effect - that must be the excessive Sangria up there in California. <g> As to "BBRC has a great reputation around here" I for one am not at all surprised. They show all the earmarks of a quality outfit - in many ways they remind me of a smaller Analog Devices awhile back. Kudos to them! Shane.

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