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

To: Justa Werkenstiff who wrote (4237)	12/30/1997 10:20:00 PM
From: Jurgis Bekepuris	Read Replies (2) \| Respond to of 10921

Justa, You hit an important point which occured last year too - visibility. Any future estimates are always just estimates. Nobody can know the exact decisions of companies to build new fabs, buy from company A vs. company B, etc. SEA crisis just muddied the not-so-clear waters even more. With loss of visibility estimates are cut down because of crisis and have higher deviations. Let me go over a couple of things that happen during a crisis in the semi-equip field. First of all, even Jim Morgan (AMAT CEO) has limited visibility. His customers start playing poker: "I don't want to cancel the order until I am totally sure I won't need it because lead times are long", "I can't let XXX know that I am canceling orders because they will get my marketshare", "Let me wait and see whether YYY gets out of the DWIZ market, maybe I should remain in the DWIZ market". This continues until the crisis passes. If even Jim Morgan can't know the exact situation with orders, how can we or the analysts know it. We can make rough guesses, but not more. I think Jay mentioned that he talks to managements of semi companies. I'd like to hear his comment on how reliable info about expansion plans they give him. What happens after crisis passes? In 1996 the crisis passed when Jim said: "I see X bln revenues in 1997 and Y% percent growth". The companies suddenly dropped their poker tactics and rushed back to order. This may happen again. It's also possible that the downturn will last longer. Either visibility will not improve and companies will continue to play poker, or negative visibility will appear. In this case Jim may say: "I see X bln revenues in 1999 and Y% percent decline". What should we do in this situation? We can continue reading various analyses but we have to accept low visibility and follow our strategies with this limited view. Good luck Raimondas