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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Pete Young who wrote (46722)	5/14/2001 4:29:44 PM
From: Cary Salsberg	Respond to of 70976

I think you need to precisely show how 300mm will drive down the cost of all the goodies you want but are currently too expensive. 300mm will not drive down the cost of flat panel displays. Also, communication chips, such as mixed signal and DSP, commonly don't use the most advanced chip technology. That has been primarily reserved for memory and logic processors, two areas where the solution has already outpaced the problem.

To: Pete Young who wrote (46722)	5/14/2001 4:30:30 PM
From: willcousa	Read Replies (1) \| Respond to of 70976

Pete, thanks for sharing your thoughts. I agree with those parts I understand.

To: Pete Young who wrote (46722)	5/14/2001 5:46:08 PM
From: w0z	Read Replies (1) \| Respond to of 70976

In the telecom area, the sun will shine again, but I think the safest areas might actually be the providers themselves Why not GaAs chip manufacturers? (AHAA, TQNT, RFMD, VTSS, etc) Most high frequency high bandwidth products will use this technology since it is the only process that works at those frequencies. I've tried to find enabling semi-equipment companies for GaAs but have struck out so far since GaAs does not appear to require state-of-the-art semi-manufacturing equipment.

To: Pete Young who wrote (46722)	5/14/2001 6:52:30 PM
From: Proud_Infidel	Read Replies (2) \| Respond to of 70976

So, now, investors in telecom, used to government subsidies, and comfortable monopolies, are now in the same boat (cold water) as us "silicon sailors" have been in for decades--how to make money off a market where price/performance declines year after year. And these telecom "investors" are throwing a tantrum. Used to offering the customer the same ole (reliable) service decade after decade, and getting to charge more for it, they are now in our hot seat. (Welcome, pilgrims.) AND So, as crazy as it sounds, maybe the place to put money in telecom is, after the ships with obvious holes go down, into the GX’s, WCOM’s, SBC’s, and LVLT’s. I am not so sure I agree with this second statement. Why invest in a sector with reltatively little IP and barriers to entry which are not that large? If this were not bad enough, the first highlighted paragragh indicates that they will not be in the drivers seat in terms of pricing in the coming years, with consumers having ever widening choices. When investing, I prefer to stick with companies with large IP portfolios and enormous barriers to entry. WCOM and SBC do not come close to fitting this bill. Excellent post BTW. Regards, Brian

To: Pete Young who wrote (46722)	5/14/2001 8:28:20 PM
From: Sam Citron	Read Replies (1) \| Respond to of 70976

*"if not into the storm, then why, and if not into technology, then where, if anywhere."* This sounds like the mantra of a heavy weather cowboy sailor rather than a prudent investor. Do you think the return in tech will really justify the risk of sailing into the storm? Tech is still the most overhyped sector of the market. I had an old professor (Bob Sobel, a stock market historian) in a securities analysis class 30 years ago teach me that every bull market ends with an unhealthy preoccupation with the latest tech fad and we will know it by the plethora of IPOs with very odd suffixes in their names and very strange sounding business descriptions. This latest bull market has certainly gone by the same old plan. I think it is fitting that perhaps the savviest investor of the last 50 years (Warren Buffett) was distinguished by his very healthy distaste for technology for all the right reasons. I don't need to sell anyone an investment theme or mantra, but simply surf on any valuation disparities that I am able to deduce between perception and reality. I apply bottom-up valuation screens as well as top-down sector rotation strategies. I believe that it may be way early to be getting more than ankle deep in yesterday's niftiest sector. I don't even know what tech means anymore, except possibly a business plan that needs to be rewritten every three months. Why this unhealthy fascination with bleeding edges when so many other sectors look so intrinsically healthy, such as pharmaceuticals for example? I've already got myself enough silicon trinkets to last me for awhile, but I keep putting together pillboxes for my mom, who is now living with me again after all these years, and the last time I checked this 85 year old woman is getting 15 different pills per day. So if you want to sell me on an investment theme based on inevitable trends or everyday reality, I'd sooner buy pharm than silicon or telecom. And yes, boys and girls, the barriers to entry are just stagerring. Now I see pharms as tech plays (same R&D/sales ratios) with some very attractive defensive and demographic features. Don't ask me for any specific names yet though, since I've just begun to scout this sector. If you do want to play telecom, then at least look at IDT, where you have alot of cash for survivability, and a CEO who is as clever as they come. see Barrons this week

To: Pete Young who wrote (46722)	5/15/2001 4:14:53 PM
From: Jacob Snyder	Read Replies (1) \| Respond to of 70976

OT re telecom: good post. Last year, when I was buying WCOM, I thought the new telecom markets were not going to end up as commodities. Now, it looks like they are, and are starting life with a glut, so even the first-to-market don't get even temporarily-high margins. The hard part of investing in telecom is figuring out who has barriars-to-entry. Looks to me like the equips are better bets. I'm thinking now that QCOM, JDSU, CSCO, TXN, NTAP, EMC are better bets than any service provider (even the RBOCs, who will collapse when their monopoly on last-mile is finally broken). When cable and 3G wireless (fixed and mobile) are built out, the RBOCs will go the way of the CLECs. Those dinosaurs are incapable of surviving in a truly competitive market. For the next 3 years, only wireless and last-mile are going to provide any profits in telecom. Longhaul data is now (and will be till 2004 at the earliest)in glut/near-zero margins. With current overcapacity and wave-division technology, longhaul glass may be in overcapacity forever. I will probably stand aside till 2002 or later, in this sector. I think the process of destroying capital in telecom has only just begun, and there is still an immense amount of pain in front of us. Before it is over, 100-200B in debt will be written off by N. American and European telcos/telco equips, and a lot more companies need to disappear. It's going to be an agonizingly slow process, lots of companies and investors hanging on and doing stop-gap measures over and over before giving up. When you see WCOM still (still!) adding massive amounts of debt, it's a sign things haven't hit bottom yet. The sector won't bottom until access to debt and equity capital is totally shut off, and we see who can survive just on their cash flows and cash. I'd give even odds that the telecom industry goes the way of the California electricity market: a disastrously failed deregulation plan is followed by a public bailout and reregulation. The government can't let companies the size of T fail. It's really sickening the way stupid decisions by corporate and govenment decision-makers gets fixed by handing the tax-payer a huge bill.