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

To: shane forbes who wrote (8095)	12/5/1997 2:27:00 PM
From: jelrod3	Read Replies (6) \| Respond to of 25814

IT'S TIME TO "REWIND" AND "REPLAY" A TUNE WE ALL HEARD SOME TIME AGO... and compare what we have been seeing in technology stocks over the past few weeks to months. Who was it that said this, and when did he say it?: "In real terms a bear market has begun, I believe the tech cycle has peaked. "Orders and shipments won't decline. But the rate of growth will slow to 10% from 20% or 25%," he says. And, he adds, "prices are continuing to go down but instead of a 10% decline, it will be a 15% decline. These companies are leveraged for growth. Their expenses require them to grow at 15%. So, the combination of those three trends will have a devastating effect on technology stock prices," he says. Tech stocks *** he believes are in for a "growth recession" that will last "several years" at least. "It's simply a case of too much technology equipment having been stuffed into information technology departments that can't effectively digest it. Users are questioning the payback they are getting from their massive investments in [technology]," The bigger problem, he says, is too much capacity. "This tech boom began in 1991 when the capital spending cycle picked up. Basically, rising prices and a speculative environment led to an infinite ability to raise money for technology companies," he says. That has led to increased competition among technology companies and an oversupply of new products. "In my view, this is the beginning of a new growth recession in technology. A fresh up-cycle will not begin for several years at least. After all, the previous cycle peaked in 1984, and a new one didn't begin until 1990." Indeed, a big part of his argument for why technology stocks should be in for a bear market is that he believes the economy is slowing. Indeed, he forecasts disinflation and a 30-year bond that could drop to as low as 5% over the next year and a half." ANSWER: BARTON BIGGS I'm no fan of this fellow, and am long big time on tech stocks. But hmmmm, he sounds awful right in retrospect, doesn't he??