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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: Stu Bishop who wrote (3818)	12/14/1997 9:02:00 PM
From: LLCF	Read Replies (1) \| Respond to of 10921

<Is the blood going to increase or decrease from here. Opinions?> Well, some of the more cautious people on the equipment threads and other periodicals (Carl Johnson's "Infrastructure") were saying during the frothy times (frothy in hindsite) that these stocks should (could?) trade much cheaper... they were right. It seems that some of the stocks are approaching the value numbers that were bandied about (10 PE's etc)... seems like if you think the group in viable you have to buy some of your favorites here and expect em to go lower where you would add to the position. My question in whats everyones favorite... from what I've read it seems that AMAT, BRKS, SFAM, EGLS and ASYT are well regarded? Maybe throw in ASMLF, SVGI, or UTEK for lithography?? Whats everyones favorites and let the nibbling begin! DAK DAK

To: Stu Bishop who wrote (3818)	12/14/1997 9:11:00 PM
From: Gottfried	Read Replies (2) \| Respond to of 10921

Stu, >Both Barrons and Fortune have new issues which tout the semi equip companies as bargains.< We're doomed.<G> GM

To: Stu Bishop who wrote (3818)	12/14/1997 9:19:00 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 10921

Re:Both Barrons and Fortune have new issues which tout the semi equip companies as bargains. In times like this, SENTIMENT is the overriding factor IMO. Regardless of what these journals think, nobody wants to own these stocks at the moment. Positive news in the equipment sector led us up the the August highs and fear over recent developments has pummeled our beloved stocks to their current levels. I believe before we see a reversal and a new upward trend for this sector, some + news must come out. There has been some recently (i.e. Worldwide Chip Sales for Oct.) but the earnings preannouncements are obviating any good news currently out there. I believe we are at OVERSOLD levels but also thought so when AMAT-$32 and SFAM-$28. Lately, my opinion seems to be worthless to Mr. Market and my portfolio shows it :-(( Regards, Brian

To: Stu Bishop who wrote (3818)	12/15/1997 3:09:00 PM
From: P.T.Burnem	Respond to of 10921

Both Barrons and Fortune have new issues which tout the semi equip companies as bargains. At the bottom, everyone will hate semi-equipment stocks because everyone and his brother will have lost their shirts trying to pick up the bottom. Just like they hate disk drive, HMO and gold stocks today. PTB

To: Stu Bishop who wrote (3818)	12/15/1997 8:45:00 PM
From: Jay M. Harris	Respond to of 10921

Stu, I have been lurking on this thread since the end of the most recent semi cycle. IMHO we have a good deal of downside left in all of the equips. Micron's semi gross margin is imploding! With this thread being so aptly named at the beginning of the downturn, I will attempt to respond to your question. To begin, I will tell you that I'm currently long Veeco and Cymer. I will ride both of these companies down into the valley of death to a multible of 1X revenue. Then I will load up the store. The very fact that many people including infrastructure most recently and equipment managment teams are still bullish confirms that we have alot more downside in all of the equipment stocks. We have not even had our first negative book to bill let alone major push outs ;cancilations; fab bankruptcy and equipment writedowns for doubtful accounts. Do you remember the sub-micron fab only 18 months ago going broke and defaulting on equipment payments? Thats the problem! Not enough fabs went broke and there is too much capacity. Please read the following article: 16-Megabit DRAM Spot Market Prices Fall To $2 (12/13/97; 3:23 p.m. EST) By Jack Robertson, Electronic Buyers' News <Picture>Dataquest reported that 16-megabit DRAM prices crashed as low as $2.10 each on the U.S. spot market. Dataquest said prices of 1X16-megabit DRAMs<Picture> had plunged 26 percent to 29 percent in two weeks, which it called "a fantastic drop" coming on top of a 30 percent price fall in the preceding month. EDO<Picture> and fast page mode 16-megabit chips last week were selling below the levels of 4 megabits only nine months ago, according to the American IC Exchange, in Aliso Viejo, Calif. AICE said 4X4-megabit 5-volt fast-page 16-megabit chips were selling at $2.71, and 1X16-megabit 5-V EDO had fallen to $2.78. Prices on 64-megabit parts, which profit-short memory makers had hoped would rescue them from the market bloodletting, also continued a freefall. The 4X16-megabit 3-V EDO and 16X4-megabit 3-V EDO both sank as low as $14.69. Other 64-megabit versions were selling in the $19 rank. Analysts said they believed most DRAM companies are losing a lot of money at these price levels, and ponder how long the companies can continue to sustain the red ink. The glutted global DRAM market is not expected to ease up any time soon, casting doubts on earlier predictions that DRAM prices might rebound in 1998. The continued DRAM price crash also holds down the revenue market projections for the enitre semiconductor market, since the memory chips account for such a large portion of industry shipments. <Picture: TW> ***************************************************************** Now when the Tiger currencies decline 60% in 2 months this allows them to export chips to the US for very low prices. When these chip sales are converted back into say the Korean Won there is a foreign exchange currency kicker. This is because you can buy 60% more Korean Won for every US Greenback. The prices above do not even cover the variable cost per wafer! Consequently, Micron technology (worlds low cost provider) is losing money at the above prices. The memory market is 50% of global cap ex equipment spending! Consequently, 50% of global fabs around the world are cash flow negative when balance sheets are strained and financing non-existant. Please don't fall into the .25 micron product cycle trap! Moores Law will not save any equipment company business models in this down turn. IMHO this down turn could be more severe than the prior downturn with as many as 6 fabs going broke! I have the entire equipment group trading to 1X revenue with a 15% haircut off trailing revenue figures. This is because PC box makers (60% of chip consumption) and networkers are all moving to the direct (build to order) distribution model. Also, the sub $1,000 PC (less silicon content per unit) in now up to 37% of total household units and rapidly gaining popularity. This is forcing chip OEM's to cut production with bloated finished goods inventory and rapidly declining prices. This will also reduce aggregate demand for new equipment in the second half of 1998. The stocks are currently beginning to discount this in my opinion. However, this will take 2 more quarters before "Blood is running in the streets!" Buy when memory prices rebound by 50% and the equips are losing big bucks. Also, when you buy, there should not be 1 buy opinion from any Wall Street Analyst! Wait until the last one throws in the towel to be politically correct to save his or her job! Then and only then will you get good value and be poised for the preverbial "4 bagger". To the thread, I have posted for a couple of years on the IPEC thread. I have been out of IPEC for several months and since voiced my bearishness many times. I am leaving the thread to devote my limited resources to this thread. I hope I can be of assitance. Incidently, I don't short stocks, as I am a PM and my employer will not allow those types of transactions. Don't worry about my posts being biased in any particular way. I generally am a long term buy and hold investor. Regards, Jay