Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Novellus -- Ignore unavailable to you. Want to Upgrade?

To: Joseph Beltran who wrote (2963)	10/16/2000 8:03:11 PM
From: Thomas M.	Respond to of 3813

How can one reconcile what J. Joseph @SSB is saying about the "cycle" being over with what has been said by the ceos of LRCX, KLAC, and now NVLS about prospects going forward???? Easy: those CEO's have a lot of stock and options they need to unload on the ignoratant public, a.k.a. "suckers". Tom

To: Joseph Beltran who wrote (2963)	10/16/2000 8:58:15 PM
From: Ian Davidson	Respond to of 3813

I saw Graham Tanaka of the Tanaka Growth Fund on CNBC this afternoon. His fund is up 60% for the year I think they said. One of his favorite stocks is NVLS. He says the semi cycle is far from over. Ian

To: Joseph Beltran who wrote (2963)	10/16/2000 10:16:05 PM
From: The Ox	Read Replies (2) \| Respond to of 3813

Hi Joseph, I can't answer your question about the analysts vs. the CEOs. I have a few thoughts and I would welcome your opinion. The bar has been set extremely high for the semi-eq industry. The 'fault', if there is such a thing, falls on the incredible growth shown by these companies and the absolute mania that the stocks went through during 1999 and the 1st Q of 2000. Many industry stocks went up hundreds of percentage points in a very short period of time. The returns made by the investors, who were smart/lucky enough to buy into these companies during the downturn in 1998, were beyond most people's wildest expectations. Wall St finally came to their senses this year and now they are going to 'punish' the stocks for having such a wonderful run, IMO. The perma-bears will just cry tulipmania and attempt to equate semi-eq stocks with questionable dot com companies. All 'tech' stocks will once again be lumped together for the purposes of talking down the stock market. Analysts can 'punish' stock in many ways, the most common way is to set outlandish growth targets. They will use astronomical valuation methods and 'justify' these targets as long as the stocks are running up. Once they push these crazy valuation methods to the absurd level, all they have to do is wait for the companies to fail to match these silly criteria, or better yet, decide that the 'cycle is over'! Everyone starts to bail out and the self-fullfilling prophecy is created. I think the CEOs get caught up in the astronomical valuation methods, since they believe very strongly in their companies and see the wonderful growth that's happening. They want their valuations as high as possible and get blinded by dollar signs during the run up. And who can blame them? The reverse happens as well. Stocks get taken out behind the proverbial woodshed and beaten beyond reason, as we saw during 1998 and we are starting to see it happen again this year. Whether industry growth starts slowing in 2001, 2002, or beyond, it will slow since the growth rates being shown currently can't possibly be sustained indefinitely. The key is to buy good companies during the 'beaten beyond reason' season. Many companies have fallen dramatically from their highs but are still up substantially from their washout 1998 lows. I think it's important to keep this type of 'balanced' view before buying. BTW, The move to the 300mm process will take a few years and I'm not sure anyone will have a fully operational 300mm fab running before mid/late-2002 (but I could be wrong on this). There should be plenty of business for the semi-eq companies during the next couple of years. The worry-warts are convinced that this will coincide with the overproduction cycle causing a major reduction in margins and pricing power for the industry.

To: Joseph Beltran who wrote (2963)	10/16/2000 10:16:15 PM
From: john dodson	Read Replies (1) \| Respond to of 3813

Well, here's a shot at "reconciling" the claim that the semi cycle is over inspite of the blowout numbers being reported. First of all, declaring it "over" is a bit of a stretch. From what I've read, it's more like the upswing of the cycle is getting tired, and we're in for a slowing of growth, plateau, and eventually a reversal. Timeframe for such is anybody's guess. While I am totally bullish right now on NVLS @ $35, I do see where it is possible that the growth is decelerating. That is, while the b2b is still growing (along with demand for semi equip), the growth rate could be declining. If that is indeed a pattern that bears out, the question is how long until a consistent observable pattern emerges where even the staunchest bulls believe that we're ticking down. Could be several more quarters of blowout revenue and earnings, even in that scenario. That's my interpretation of the doomsayers thinking. Then again if the cycle is not over or even in decline mode, we could be on the verge of another big upswing! Time will tell. -John

To: Joseph Beltran who wrote (2963)	10/17/2000 12:09:53 AM
From: Songwrks	Respond to of 3813

Novellus falling after hours--yes, something is "wrong with this picture"--I am a very grateful regular on SI who rarely posts. After reading Novellus' stunning quarterly report only to watch it fall in after hour trading, I finally reached my boiling point and wonder if anyone else has too. This past week, we've watched stellar companies report wonderful results only to be punished. Isn't there some way we could boycott companies (not to mention tv stations) employing analysts who make their living at the expense of serious investors and tremendous companies by misrepresenting forward earnings and growth targets, by preying on the average investor with stories designed to make them buy and sell as often as possible? Granted, prices climbed to extraordinary heights during the internet "craze" and the market has now returned to embracing companies that represent true value and true growth. Granted, this "shakeout" has separated the wheat from the chaff. And, granted, no matter how much certain analysts inflate forward projections, they can't actually MAKE us buy or sell. Still, there should be some accountability where opinions literally move millions of dollars. Even journalists are held to some degree of responsible reporting. Let me close by praising those analysts who are responsible, accurate, and truthful. I wish I had one-tenth of their skill. Like any profession, a few bad apples don't spoil the whole bunch... SongWrks (I should mention I own no Novellus. Strictly LTBH "gorilla" companies)