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Technology Stocks : John, Mike & Tom's Wild World of Stocks -- Ignore unavailable to you. Want to Upgrade?

To: LTK007 who wrote (1625)	7/30/2000 7:15:10 PM
From: Logain Ablar	Read Replies (1) \| Respond to of 2850

LKT The markets do not reflect what is today but what will be in 6 to 12 months. The market is indicating a slow down and possibly a recession. Whether its in produciton (chips, equipment, whatever), revenue or earnings does not matter, all will be impacted. Look what you posted. Large demand for electrical components mean component prices will increase raising costs (the Taiwan FABs have indicated 10% price increases just this week). Can these be passed on to the end user? To any extent they are not, margins are impacted. When margins are impacted earnings are impacted. If a company has been growing earnings @ 50% and that is how the stock is priced, if growth drops to 40% (I'm being kind here since in a recession costs can not be cut as fast as the drop in revenue) the stock will drop. The market has been priced to perfection and it is now showing many cracks. With the added risk the market will not place as high a multiple even on the good growth stocks. The second and lower tier will fare much worse. The environment is changing. We are not applauding Joseph but if you read his actual report his points merit consideration. In any event it will be an interesting Monday. Tim