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To: Woody_Nickels who wrote (5248)	7/3/1999 9:05:00 PM
From: John McDonald	Respond to of 9582

Cary, Are you at the 2.5 mark yet?

To: Woody_Nickels who wrote (5248)	7/3/1999 10:27:00 PM
From: Ram Seetharaman	Respond to of 9582

Thanks for your post! Two things that come to my mind for 1999 are 1) upcoming earnings 2) possibility of recession either in U.S and Europe or in Asia. Regarding the first most companies CNBC surveyed and follow are quite bullish that the second half of 1999 will be growth and profit oriented. Every sector has some laggards like UTEK, SVGI for the semi-equipment makers that show little price movement even when orders are announced. Regarding the second I don't see a recession in U.S. No Economist is even talking about it. Few years ago a dude named "Bhatra" came up with a doomsday book about how we are all going to starve for food etc...in the future! Most Americans I know are getting only fatter! Throughout the nineties the stock market boomed and inflation was tame. I also don't foresee any "Asian flu" this summer/fall. News from Europe is getting better. All the analyst who screamed early in 1999 that a 30 % correction (including Barton Biggs of Morgan Stanley!) in the market is coming have mud on ..... We may see a mild 5 % adjustment as we saw a month ago, but these adjustments are wiped out typically in a week or two! The internet has changed the way people are operating (I have to give kudos to the Reddys of ALSC for their vision in investing in Maverick Networks and association with BRCM - very proactive!) and it will continue to do so as cheap or $ 0 PCs enter low income households like a VCR. The growth will be in powerful multi-disciplinary Chips and software. In Silicon Valley there are ten of thousands of jobs unfilled in hi-tech and software and houses get three dozen bids with price offers well above list price! They don't see a recession for the next two years in the Bay area. In Asia as you saw in the UMC episode, things are getting better and so in Japan. With all this I don't foresee a dramatic slowdown in US. The Fed is in a "preemptive mode" ready to raise rates to combat inflation and money is available for Corporations on the cheap! So the rest of the year should just sail through. Next year is election year and the smallest sign of recession is death for the incumbent as it did to George Bush in 1992. Clinton is not stupid - he will bend over backwards to straighten out the economy and lay the road clean for Al Gore (If the economy has 4 % unemployment and growth is good it is usually difficult to overthrow the incumbent!). With such a scenario, it bodes well for companies that watch their bottom line as the market expands. Small well managed companies that show growth and profits will do very well. The big fat ones are the ones that are going to be trimming down. Most job growth in US is coming from outfits that have less than 200 people! I see ALSC, ESST doing very well till the end of 2000. If by then they improve their debt picture and profits, they will even go further, if they expand into new markets and not get stuck in the cyclical chip business.