I trade MU based both on FA and on the basis of a computer model. When I got into MU in the mid-20's I never dreamed it would go to 55 or I'd have made a lot more money on the rise than I did. Just imagine how cheap December 40 calls were then....
There are several things to keep in mind about MU. First is that no one wants to see the US without a DRAM maker, and IBM doesn't count, ergo the INTC and TI deals. I didn't anticipate them, and in fact was short when the INTC deal was announced, but wasn't surprised by them. Next thing you have to remember is that funds love to invest in technological leaders in fundamental technology, and they love MU. Thus MU has legs - when things go its way it can move. When I got in I expected a move to the mid-30's, maybe to 40.
Are things better for MU? Yes, definitely. They appear to be getting yields above 50% at .21µ while the Koreans are perhaps getting 40%. Thus MU converted fully to .21µ while the Koreans haven't. This gives the Koreans a significant cost disadvantage, and since they no longer have deep pockets, they have been forced to slash production to keep prices up, giving MU breathing room. Other companies such as TI or the Japanese were even further behind.
Will the Koreans catch up? Quite possible. Will DRAM prices fall now that Christmas is over and Korean production is headed this way? Almost certainly. Will MU tank when DRAM prices begin down? Again, quite possible. But since I think the DRAM price fall will be moderate, and that prices will hold at the $8 level, I doubt MU will fall below the mid-to-high 30s for now.
As for offending me, don't worry, no offense taken. I just thought that since I accidently bumped into your off-topic remark I'd feign indignation. <VBG>
Carl
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