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.

Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: Gottfried who wrote (3315)	4/13/2001 12:24:26 PM
From: The Ox	Read Replies (3) \| Respond to of 23153

If we use the patch as a reference point, we know from past experience that negativity can reach incredible levels where the future becomes discounted to the extreme. When oil was $10 a barrel, there were plenty of folks out there who decided that the trend would continue and that $5 oil was right around the corner. We are starting to see similar views of the tech world's future. Let's assume that all sectors that make up the high tech segment of the investment world will show negative growth for 2001. First, what are we comparing to? 2000 and 1999, two of the greatest boom years these industries have ever seen. Second, a return to the growth cycle after the downturn is now being discounted (imo). I have seen very few comments from people who believe that we will return to the previous growth paradigm as soon as next quarter. Most views that I have read stated that q4'01 is the earliest that we should expect growth to reappear. We should also 'bear' in mind that when growth does return, the growth will start from the bottom of the cycle and that year over year comparisons will still be terrible. One look at the statistics for the growth shown in 2000 semi sectors makes me think that 2001 comparisons could be even worse than we saw in the patch during the winter of 98/99. During the last downturn in the patch, by fall of 98 we started reading about how it was different this time for the price of oil. We were being told that oil prices would stay low and most probably would continue to trend downward toward the now infamous Economist's target of $5/bbl. We are reading about similar views in the high tech world. It's different this time. The cycle has been broken and it can't be repaired for years. I'm not trying to downplay Commander's information. This is very important to those who still are under the impression that things will turn around in Q2'01. Like we saw in the patch, the high tech companies that aren't run efficiently (TCMS is the first that comes to mind) will be 'taken out back and shot' and those that are in the wrong niche (like the seismics and fabs) will have a long, tough period before any rebound can be seen. There will be companies in the same sector that will react differently to the rebound and this is where stock selection, as well as entry timing are the keys to future gains. Some won't have the patience to buy in while we have little light at the end of the tunnel and even fewer will hold until the rebound is in full swing. Too many people want it all now but that's not the way it's going to work. It didn't work that way in the patch and it won't happen this way in the tech sector. jmo, mh

To: Gottfried who wrote (3315)	4/13/2001 1:18:52 PM
From: Sharp_End_Of_Drill	Read Replies (4) \| Respond to of 23153

Gottfried, you wrote: <<<Commander, thanks for the news from ground zero. You said >When we submitted our RFQ, Jabil notified us that they had enough inventory for the rest of year.< The unspoken assumptions are that Jabil told the truth and Jabil's situation is typical.>>> What they really meant was that since they had gotten zero orders in the last three months their inventory will theoretically last for infinity, but since they know that can't be true they just guessed and said one year. From you hope for tech springs eternal, and that's an admirable trait - but one that may make your pocket book suffer. I'm in the same camp as CC and Dabum. My gut feel and everything I read supports my notion that tech is bleeding far worse than most people realize. This current rally is a typical bear market rally, nothing but fluff. I agree we'll see CSCO in single digits, along with many others. There is a pile of money to be made if I'm right, and the higher this rally goes the better for that plan. Sharp

To: Gottfried who wrote (3315)	4/13/2001 5:10:36 PM
From: rich evans	Read Replies (2) \| Respond to of 23153

This Jabil story is strange. These companies specialize in supply side management for their customer OEMs. They provide services not product.(Manufacturing services)Their margins are small and they take no inventory risk. They couldn't and still exist at such low profit margins. So their inventory is the OEMs responsibility. Also Jabil outsources their enclosures. In the CC I have listened to, inventory is being reduced and sell through should start occuring in Q3 so at that point demand will control. We will no more after the current ccs I guess, but I think Q4 is looking up for most companies including Jabil and maybe this is what the market is responding two. But then.. Rich