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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Gottfried who wrote (3673)	6/26/2002 12:05:56 AM
From: Sarmad Y. Hermiz	Respond to of 95530

>> Probably because their expenses are higher: they hired, bought equipment etc. Well, ahem, yes of course. But why did companies whose history goes back 100 years (Lucent) adopt such a precarious business plan ? My answer is that the abundance of venture capital allowed formation of compnanies whose business plan was to get sales by giving product away. Basically dare the established companies to match their loss-leaders. Which is how we get into the fix that in some essential industries - like telecom equipment - every company is losing money. Of course, until the upstarts burn through their VC cash no recovery can happen. Higher interest rates can speed the process along. And low rates retards it. So I wonder if the fed's aggressive rate drops actually prolong the market decline ? That is what gets said about Japan. Their zero rate just perpetuates their financial morass. edit. I'm thinking that WCOM's coming demise, as well Adelphia BK are actually necessary milestones on the way to restring health to various industries. Sort of like the sacrificial lamb......... Sarmad