NI, I want everyone on tv and in the press to stop saying "this is crazy" and start saying, "it is extraordinary, but that is where the growth is." That's what happened last summer. It will happen again. I can already hear the rumblings. If you hit a price, some jerk will justify it. Right now, even CNBS is making fun of the prices. But, they will eventually be co-opted by the Street and other advertisers. So, I want to see more jerks and more consensus that the prices are extraordinary but not excessive. Then I buy puts.
The difference between MU and YHOO is that Yahoo can tell a growth story that has some minimal chance of coming true some day. MU is an old line commodity co. that has no chance of ever being a growth story. It could be a value stock some day, but not at these prices. Not even at 10% of these prices.
So, what we have people believing on MU simply cannot and will not happen. That doesn't mean that they will never show another nominal profit (without any free cash flow, as usual). They probably will. The point is, if you lay a decade of nominal eps out and include the losses, look at the huge debt burden and the leverage risk, there is no way this co. ever justifies its current price. And, worse than that, the DRAM has been heading south and even dumb and dumber should soon become aware of that.
MB |
