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.

Strategies & Market Trends : Steve's Channelling Thread -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (7771)	11/13/2000 6:49:35 PM
From: mishedlo	Read Replies (1) \| Respond to of 30051

Best Buy's add should have said: "Get yesterdays technology next year." from Artie on the Fool ============================================= From Colin: OT - Artie, where do you live? It looks like you might be in my area ... (Overland Park, KS .. just south of KC) Sadly my BestBuy won't sell me one either ... I even brought in the add from the Sunday paper. I have never seen such a blank stare from a salesman. Cheers, Colin

To: mishedlo who wrote (7771)	11/13/2000 6:57:43 PM
From: Rashomon	Read Replies (2) \| Respond to of 30051

Mishedlo, the scary thing is how many high-growth value stocks that have been created in the last couple of months. I'm still holding one of Tim Lamb's favorites, the semi test equipment maker LTXX. Earnings are projected at $2.20/shr for fiscal 2002, they're running a substantial backlog, they're growing market share, and their segment of the semi market, system on chip test equipment, is growing faster than the market as a whole. They've gone from a peak near 50 to 12, and I thought I was buying at the bottom with an average price of 13 1/2! The semi-equipment market is full of these things, to the point where scavenger Marty Whitman at the Third Avenue Value fund is starting to pick up semi-equipment stocks again. Zeev may be right about an early peak to the semi-cycle, but there's a number of respected analysts who are indicating that back-end equipment sales will be strong through 2002. It'll be nice to have a winner to this election, though that may not fix all the NASDAQ woes.

To: mishedlo who wrote (7771)	11/13/2000 7:29:49 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 30051

Misheldo, you got to understand the "dynamics" of the semiconductors and the semi- equip market if you want to play in this space. In 1995, when MU was making new highs at $95, the street and Mu were talking with confidence about annual earnings of $19 a share two years hence, and thus $95 was supposed to be a bargain. Not only that, Vinik was touting the stock as well (while selling in stealth). What happened? It is a cyclical industry, not only with an intrinsic ASP decline of about 30% per year, but with sharp ups and down in the price depending on the supply at the margins. Sure, SSTI has had a phenomenal string of recent QOQ fantastic growth, but the market is looking forward and asks itself, what happens if we have a glut? Well we now have DRAM once more hitting new lows (last I heard was $3.5 for 64 megs). Why do we have such low prices, because the PC market is growing at "only" 15% instead of the 18% forecasted earlier in the year, and because Dataquest kept telling every one that shortages are looming, so box makers build up their inventories (and possibly did double ordering, but we have not heard of that, as yet). So, why should it impact the flash makers? after all there is a real shortage there, right? Well, the dram makers can easily convert their production from dram to flash, particularly the five Taiwanese houses that make marginal profits (but still have together some 20% of the dram market), and in the process, you guessed, over supply occurs and slam, the prices fall to the basement. The fear is really that sometime in the next two years, SSTI not only, will not meet a quarterly number, but come down sharply lower, or even sink into the red. If that does not happens, than, todays price of $17 is a steal, but if SSTI does miss a quarter or two (and typically, if it misses one it will miss few in a row), then you may be able to get it for less than $10 within six months. My advice is that if you plan to play in this space, don't fall in love with any of these stocks, it is a "technological cyclical" segment with stock going between x and 3x almost every year. The trick is to buy at x and sell at 3x. Zeev