Thorough response on your part, Earlie, in the response to my posting last week. Just got back in from an unexpected trip, so no time yet to respond yet to it. Thank you, and I will endeavor to put as much thought into my response as you did into yours.
>the trading desks will be handed numerous and "heavy" pink tickets, you know, the ones that have the big word "SELL" at the top. (g)
There does indeed appear to be institutional selling. Note, however, that there also is institutional buying, as is evidenced by the current quote (as of 9:44am, Wednesday), when the size of the bid at $65.50 is 1001 and the size of the ask at 65 9/16 is 88. I believe that means that someone is trying to place an order for 100,100 shares, while the currently chosen ask quote says that someone is trying to sell an order of 8800 shares. (If I am incorrect in my interpretation of these numbers, would someone please correct me?)
The expectation on Wall Street (at least from my friends there) is that this is going to be a blowout quarter for Micron.
I understand what you're saying, Earlie, about all the individual reasons why you believe Micron is way overvalued. However, I keep going back to the macro-economics of the market:
1. Supply is not expected to keep up with demand for at least this next year or so.
2. While a few (and only a few) of the companies producing DRAM are starting to get "uncancel" or "unpostpone" their fab expansions, that capacity won't hit the market for a while, and it's not going to change #1 above.
3. We are still in the front end of a major semiconductor expansion, which is driving demand in #1.
4. My basic presumption is that the management team at Micron is competent and will be able to take full advantage of the market opportunity. While I realize that other people disagree with this presumption, I'll stand by it.
Funny how we always hammer the most on the people/companies we know the best. Here's LG Semicon, right? World-class competitor, right? Their workers go out on strike for a couple weeks, causing the company serious short- and medium-term harm, and all some people can say is that, "Well, they're BACK now, and they're going to be the death of Micron!! And not only that, don't worry one bit about the fact that they're being taken over by a bitter rival who has to try to make such a merger work. Heck, don't even worry at all about the preoccupation that must be on each of LG's workers as they know that for many of them, their days are numbered--they'll be able to focus 100% on their work...it's _not_ an issue."
Now, had it been Micron's workers who were out on strike the last couple weeks and who were facing that situation, would we be _quite_ that optimistic and charitable about Micron's future? :-)
Bottom line--and all kidding aside--we've got a growing market where demand is outstripping demand and will continue to do so; a smaller handful of companies going after said market than there used to be; and the fact that management at each of these companies will likely do most things right enough that they will all do fairly well the next year or two. I'm not saying that I know the management at MU personally, but I do have friends in the industry who do. I have a great amount of respect for those people, and they have only great things to say about Micron's management's ability to implement and execute. Obviously there are people on this thread who feel otherwise. Ultimately the market will render its decision, and we shall see.
Until then, good trading. Regards,
SlowThinker |
