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Technology Stocks : IBM
IBM 305.70+0.2%3:59 PM EST
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To: vip who wrote (4662)2/5/1999 5:01:00 PM
From: Arrow Hd.  Read Replies (2) of 8218
 
FWIW, the slide is due to a number of issues. There still is
residual fallout over the 6% 4th quarter revenue number and the
hardware shortfalls. Then there is the chip pricing issues that hit
Intel and others this week. IBM makes chips and sells them through
OEM channels. It is somewhere around a billion per year and has been
very profitable. We are entering seasonal weakness for PCs and the
numbers in this sector are not too good yr. to date. The inference
regarding chip price attrition is that hardware sales are dropping
which reduces demand for chips which causes increased competition and
price attrition for the remaining business. Then you have the
investment allocation gurus who hallucinate that you should move
another five percent to cash and the sector crowd that try to hype
whatever they think is hot, and then is it a value play or a growth
play, etc. Add to this the fact that interest rates are moving up
slightly and there is thought that the Fed will raise them this
summer (rising interest rates kill a market quicker than anything)
and though today's labor statistics washed and were inconclusive every
dopey economist was at the wall of worry wondering what draconian
plot was actually at hand here. Beyond all that though, nothing very
fundemental was going on and at some point all this cash is going to
burn a hole in every fund managers pocket and they will never catch
up but that will not be our problem. Have a good weekend.
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