Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Ramsey Su who wrote (5181)	4/19/1998 10:04:00 AM
From: Joseph Beltran	Read Replies (1) \| Respond to of 10921

Interesting article on japanese bureaucracy mercurycenter.com and a related article: mercurycenter.com

To: Ramsey Su who wrote (5181)	4/19/1998 10:51:00 AM
From: Mason Barge	Read Replies (1) \| Respond to of 10921

<<in a month or two, the BTB will no longer be falling >> Ramsey, I'm with you insofar as thinking the industry will recover, but I wouldn't discount the importance of a BTB of .8. Where PE ratios are 15 and 25, one expects that future growth is going to be somewhere in the same general vicinity, i.e. a PEG of 1.0. A BTB is essentially a prediction that gross revenues are going to decline at the rate of 20% per annum for one month in the future, although obviously the correlation isn't so exact as the bookings are spread out. Holding a stock with a 20 PE and negative earnings growth forecast is a nerve-wracking business. Even more for a fund manager, who has to explain his decisions to a boss/committee. So, I think we're going to see some strong selling pressure on the stocks unless things brighten up fast. This is just the numerical manifestation of something that is still getting worse, pushouts in Japan, Korea, and now at Intel. If AMD or Hyundai had an extra billion bucks, I'm sure they'd order some equipment, but they don't have it and nobody's lending to to them. Revenue declines like this cause even steeper earnings declines due to fixed costs/wasted capital. Hiring an employee costs money. If you lay him off, even if there is no pay provision, your unemployment compensation rate rises and he tries to find another job. You have to hire another employee when production picks up. His office sits empty as you pay for it. And so on, sorry I'm rambling. What this very low btb means to me is that earnings in the future are going to be lower than current consensus expectations. One or two more months of btb's under .90 or so and analysts are going to have to revise (even though they have shown a remarkable dishonesty in the past year, i.e. raising or lowering recommendations without changing earnings forecasts).