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

To: Proud_Infidel who wrote (4196)	12/29/1997 9:34:00 PM
From: semi2000	Read Replies (1) \| Respond to of 10921

Slightly off topic Brian, while we are off topic comparing valuations can you and all others give your thoughts on soap and drink company? I know time after time they have been true, but it just doesn't make sense to me biz.yahoo.com biz.yahoo.com biz.yahoo.com biz.yahoo.com I have nothing against these companies, but compared to intel they stop short. Valuation got to be anti-gravitional!

To: Proud_Infidel who wrote (4196)	12/29/1997 9:35:00 PM
From: Jay M. Harris	Read Replies (3) \| Respond to of 10921

Brian, to avoid the risk of being included with the "guys in nice suits on WS actually are morons,", although it may be too late, I've compiled a list of long term demographics that support your bullish stance! Some you have mentioned, all warrent review! 1) Moores Law doubles device density every 18 to 24 months, enabling products to be faster, cheaper, smaller, easier to use, more powerful that require more memory. What does a typical $2,000 PC look like in 2001 with the Merced Architecture for about $2,000 bucks? Answer; 650 MHZ; 200 Meg of DRAM and a 24 gig hard drive with onboard video conferencing and internet phone for internet telephony; conferencing and voice messaging. 2) Large markets remain untapped geographically(outside the US) and by customer(education, healthcare, manufacturing). Schools are 15 years behind the workplace in terms of computer usage. There are 6.5 billion people in the world with an installed base of PCs of roughly 230 million or 3%. Moreover, 3% penetration is overstated because many users have access to more than 1 system at the office and at home. There is no saturation here for the semi bears to gloat! 3) Only 80 million users are on the internet or 1% of the worlds population. This compares favorably to 50% of the worlds population having access to a telephone. No saturation here either! 4) Lets not forget replacement demand. Technological obsolescence (Moores Law) causes 20% to 35% annual replacement demand from the installed base (230 million units globally). 5) Product segmentation owing to lower price points(i.e. PC/TV ; sub $1,000 PCs; home game systems; work at home systems; and child oriented systems; internet appliences etc) 6) The merging of computing and telecom creating huge productivity increases and generating large returns on invested capital (i.e. call center management & internet telephony and internet fax) while driving down inflation within large sectors of the global economy. 7) Demand elasticities spurred by the continued decline of semi component prices. Also, new product developement incentivised by said price declines which allow marginal returns for prototype acceptance and capital allocation (hurdle rate economics). 8) The internet being more than just a new sales channel. The internet changing the entire corporate business model in every industry, forcing business to change or die! There is not one aspect of the traditional business model or Porter forces that won't be influenced by the internet over the next 10 years. The internet is the next KILLER APP! 9) Consolodation in Semi land owing to much higher barriors to entry! This favors US large cap global market share leaders(AMAT KLAC). The consolodation will be accelerated given the current fundamentals of the industry IMHO. 10) The US Leads in the info revolution! For the most part, we are the market share leaders; low cost providers; best global distribution; best product and geographic diversification; and calculated risk takers. This positions US multinationals nicely to compete in the global IT economy of the future. I fully expect all of these to contribute to equipment outperformance during the second half of 1998. No need to repeat what I expect between now and then. Hope this helps, Jay