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

To: Jock Hutchinson who wrote (9478)	2/5/1998 12:11:00 AM
From: shane forbes	Read Replies (1) \| Respond to of 25814

Hi Jock: I just read that! Hmmm.... I would be totally guessing! To make any sort of guess I would need to know so many details that it would be hopeless. It also is a lot of work!!!! I think I'll just punt. When talking to Diana Matley she mentioned how the Dataquest analysts had forecast for 1997 growth of, I think initially it was around 15%, then it went down later in the year to 10%, then later on it went further to 6%. As I mentioned earlier it now looks like the official number is 4%. Of course there are extenuating circumstances - a horrendous fall in DRAM prices and a very strong dollar - but it does show how difficult it is to predict even the top line in this group of companies. Think about just how tricky getting to the bottom line would be! You'd then have to know cost of sales (no clue but could make a rough guess), SG&A (could guess pretty closely), R&D (could guess reasonably closely), depreciation (no clue), taxes (could guess but even that will be affected by the Graham ramp), shares (could make a reasonable guess)... Point is with no idea about the revenues since in addition there will be potentially so many product ramps and those are subject to consumer demand that could change quickly (DVD good example) it's pretty much an impossible task! That's why I have paid absolutely no attention to recs. and forecasts by the analysts. Darn hard to do it in the best of circumstances let alone with any other complications (such as investment banking relationships) that may arise. Everything boils down to the fact that LSI is pretty low on the food chain when it comes to forecasting how demand up above (i.e., end products) could change and impact LSI very suddenly. Those guys who have to forecast single product companies in things like consumer durables or even something trickier such as housing have it easy!!! Plus we recently had another contest here - guessing where LSI would close 19 or 27 and I lost. Plus as I mentioned earlier I did think last year that LSI had a chance to hit 150 or so in the year 2000. Could happen but we are about 2 years behind schedule! I have just as much a chance as the next guesser quite frankly maybe worse! It's like the the least-knowledgeable person winning the SuperBowl pool! Boy but what a nice gesture! Pretty generous. I've heard of another contest on one of the SI threads where the winner got 4 pizzas (I think)! Also I would guess you would have to make the guesses public at some point wouldn't you!!!! Should be interesting to watch!