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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Doug Millan who wrote (27325)	4/10/1998 5:04:00 PM
From: yard_man	Respond to of 132070

For an example of what can happen: See ENCD and RGFX. 2 recent tech casualties. quote.yahoo.com GTW's future?

To: Doug Millan who wrote (27325)	4/10/1998 5:42:00 PM
From: James R. Barrett	Respond to of 132070

Remember when these products had fat gross margins? 1950's B&W TVs 1960's Color TVs 1970's CB radios 1980's VCRs, CD players 1990 to 1996 PCs 1999 ??????? Jim

To: Doug Millan who wrote (27325)	4/10/1998 6:03:00 PM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

Doug, Not only will the IT cos feel the pinch, but all the suckers who took stock options instead of cash will be real happy, too. Not all of your criteria apply to the stocks I hate. Micron Tech, for example, has a fine product that is absolutely vital in pc boxes. This product just happens to be easy to produce and too much is being produced. And that is in a "booming" economy. MU has already died and for some reason the bulls don't notice it. Fred Hickey, in his HIgh Tech Strategist, noted that MU earned $1.41 per share, over the period 1984-1993. My guess is they do not make that much 1994-2003. Oh, yeah, this is a "value" stock. -g- If you have 700 years in your dividend discount model, it may eventually be worth what people are paying today. Gateway's problems are a commodity product in glut, a mediocre version of that commodity (if delicious apples are dirt cheap, who buys a winesap? -g-), high costs, small market share, large predators eager to destroy them. I think they go belly up over the next five years. Presstek. There's no there, there. This may not be noticed for a while and I could even see a bounce here. But a product without much of a market, at least at current prices, in a booming economy, is not going to do well when nobody prints anything. Ciena. A trendy stock that has seen better days. Lucent and other big cos. want their customers. My guess is they get them. Who has greater power to get what business remanins during a downturn, Ciena or Lucent? Duh! Manugistics. Supply mgt. software is not rocket science. Heck, I wrote some myself back in the 1970s and the Army is still using it. I think they have a hot product, but, like many software vendors, the question will be, what have you done for me lately. Somebody will leapfrog them. Fat margins attract lean and mean competition. One of my favorite areas, Cad/Cam/Cae. This includes Parametric, SDRC, Synopsis, Autodesk, Mentor, etc. If electronics slow down, and the growth is definitely slowing, what are the odds that software that make the designing, engineering, and manufacture of such products will keep selling like hot cakes? Not good. I'm not willing to pull the plug on these yet. I've made tons long and short them in the past and feel some warmth for them. But I don't see how they come out of a downturn as pricey as they are. Or even close to as pricey as they are. MB

To: Doug Millan who wrote (27325)	4/11/1998 1:51:00 PM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

Doug, I started responding to this note yesterday when my connection failed to meet the definition of that word. -g- I use some of the criteria you use to pick stocks for large downdrafts, but I also love looking at commodity cos that are traded like leading edge tech cos. Micron Tech has been my favorite for a long time, over several cycles. The High Tech Strategist points out that from 1984-1993, MU earned $1.41. That's total, not per year. My guess is that 1994-2003 will not reach that mark. Ah, some might say, they have already earned much more than that in 1994-1997. And my guess is that the losses from now to 2003, with occasional accidental small profits, will get them down to the buck something range for this decade. Plug those types of earnings into any dividend discount model and the only way you get a $27 stock is with an interest rate of negative 3 pct. -g- I agree with what you say about Cisco, but the co. has proven adept at buying its way out of trouble. But that was during economic booms and the trouble was specific to them. When the IT budgets get cut, this overpriced stock is going to have problems. The entire Internet stock area is vulnerable. Duh! Little in the way of earnings and products or services that are easy to duplicate. However, I think there is a difference between a co. selling on the net, ala Amazon, and cos who are part of the net infrastructure, ala Yahoo and Netscape. I could envision Amazon making big bucks under certain circumstances. They may not happen, but it is a store with low overhead. The infrastructure guys have no product and their service is free. Again, no barriers to entry. I think the database cos. will hit the wall in any downturn. Oracle is most overpriced. Ditto for some of my favorite firms, Cad/Cae/Cam. An economic downturn would be deadly. MB