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

To: cfimx who wrote (4224)	12/30/1997 5:45:00 PM
From: FJB	Respond to of 10921

RE:If EVERYBODY is universally bullish with regards to the LONG TERM future of this industry, maybe we need to be more concerned about what COULD go wrong there. A US recession before a Japanese and Korean recovery would be needed to throw the industry off track. I'm not sure what the odds are, but here is ONE angle on the subject. ny.frb.org IMHO, Bob

To: cfimx who wrote (4224)	12/30/1997 6:33:00 PM
From: Jay M. Harris	Read Replies (3) \| Respond to of 10921

Twister, Too many people are too bullish on this group. The valuations don't currently reflect the end of the cycle. Too many Wall Street analysts are too close to equipment management teams and are keeping their eps #s up. Also, I've seen the fab database at Morgan and Pain Webber. These spending numbers by the semi Cos are wildly bullish at -2% for 98 equipment growth to flat 98 equipment growth. I follow some of the same semis in the database and I know first hand that they are contemplating reducing their cap ex below the numbers that are reflected in sell side databases. They just haven't made the formal announcements. When they do, the sell side will start chopping fab database spending and subsequent revisions to equipment eps. Twister, truthfully I don't know for sure when we will turn the corner. I've preached all along for threaders to use memory price models as your tool of an impending turn. Remember, that under my scenario equipment eps turn down in the second half of 1998. Hence, the name of this thread. This is currently my best guess. I will assign a high % probability of a turn once memory prices recover smartly. I will alert the thread. Remember though, equipment fundamentals will be terrible when it is time to buy. Lastly, you may be able to discern my conviction from my posts. Twister, I'm not posting to make friends, and I don't just regurgitate sell side mumbo jumbo. These posts are my take on what I've learned the hard way! I'm looking at semi EPS reports (lead times;ASPs margins;inventories;channel chatter etc) This is not my opinion any more, these are the real facts. When semi's lose money equips are right around the corner. Hope this helps, Jay