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

To: Clarksterh who wrote (5023)	3/19/1998 2:49:00 PM
From: Laker	Respond to of 10921

A rule-of-thumb principle from financial analysis: for every 10 days past due on a payment, you lose 1% of your profit. For 30 days it compounds to 3 1/3%. Sure, the semi-equipt makers could play banker, just as GM and GE and Ford have financed the purchase of their products (quite profitably) for years. Maybe, if you are AMAT, you can take on this role and you might very well incorporate this into your business strategy. The question is at what cost would the semi-equipt mfrs do this? The idea is to generate profits on the capital you have to work with. At some point, this does not make sense - - which is where we are now and how we got here - - particularly with the risks associated in the market. Watch the receivables. Follow the money. Calculate the days sales outstanding figures. Earnings figures can be juggled to hit targets, "exceed analysts expectations", etc. Your finance dept can bill all you want and your marketing dept can book all you want, but make sure you collect before the end of the quarter - - or get clobbered. This is where I think we are in mid-March with about two weeks to go. Very iffy.