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

To: shane forbes who wrote (5518)	5/24/1998 9:04:00 AM
From: Mason Barge	Read Replies (1) \| Respond to of 10921

OT <<INTC has a lot of mom and pop support from investor clubs etc. Took over from KO .. as the most popular stock>> WHO DARES TO QUESTION THE GREAT AND POWERFUL OZ! er, COKE! My mom has both. The Coke has an effective cost basis of $0 and nobody even knows when it was actually acquired. This is true of a number of people from Atlanta. While this little whippersnapper Intel generates a lot more heat than Co-Cola, their performance over the past three years has been pretty near identical. But KO pays a nice little dividend. Just had to say this, sorry. People who have held Coke stock for more than 30 years always have a philosophical refuge from the vicissitudes of the stock market. I look at all my efforts to trade intelligently and then look at mom's Coke stock, and I have to just laugh.

To: shane forbes who wrote (5518)	5/24/1998 3:41:00 PM
From: Jacob Snyder	Read Replies (2) \| Respond to of 10921

Shane: thanks for the thoughtfull response: 1. re: "If investing a lump sum at today's prices I would buy neither (with a definite no for AMAT and a slightly less definite no for INTC" It sounds like your buy-in price for AMAT is about 24. Is that right? Do you have a buy-in price for INTC? 2. re: "With many competitors now in the market INTC is forced to lower the prices of their chips faster than they had to in the past. Sub 1000 PCs, from nada about 15 months ago, are something like 25% of the PC market now." Could you list those "many competitors"? Actually, I don't see that INTC has any viable competitors. I see two other companies making IBM-compatible desktop CPUs, both of them doing as well as they've ever done, and both still losing money. I see Apple has mostly finished self-destructing. I see IBM becoming a service company, and Motorola flubbing the transition from analog to digital. Cheap PCs are a growing percentage of the market, but that's because the market is getting bigger. More people are buying PCs for the first time, and they tend to buy at the low end. On the last conference call, Morgan of AMAT confidently predicted those people would want more expensive silicon when they bought their second PC. 3. "If you mean AMAT's business depends not on a first order process - chip demand - but also on a 2nd order process - chip profits - then that's exaclty the way I see it as well." Sorry for my unclear words. You are entirely correct. By "inherently more volatile", I mean that the effects get magnified at each step in the chain of cause-and-effect. A 5% change in chip demand (you're right, it's really the demand/supply balance,especially for commodity chips) causes a 10% change in semi company profits (because of their high fixed costs), which causes a 20% change in orders for semi-equipment, which causes a 40% change in semi-equipment companies' stock price today, and a 40% change in semi-equip profits (6 months from now). Caveats: I'm crudely oversimplifying. It's an algebra (not calculus) equation. Those percentages are wrong (can you do better?) I'm trying to come up with an equation where I plug in the ASP for 64-bit DRAMs, Andy Grove's age, and the length of my grandmother's toenails, and solve it for tomorrows AMAT stock price. When the results are consistently accurate to 4 decimal places, I'll e-mail it to you (VBG).

To: shane forbes who wrote (5518)	5/24/1998 9:05:00 PM
From: Proud_Infidel	Read Replies (2) \| Respond to of 10921

Re:The future is the INTERNET - bandwidth not CPUs - voice etc will bring back the CPUs to some extent but the driver will be connectivity for the intermediate and long term. Unless they make a CPU that enables faster connectivity, I think the days when the microprocessor was the driving force of tech are over. Please correct me if I'm wrong, but don't hubs and routers require ICs? BK

To: shane forbes who wrote (5518)	5/24/1998 11:05:00 PM
From: David Rosenthal	Read Replies (1) \| Respond to of 10921

Shane, >>>> The future is the INTERNET - bandwidth not CPUs - voice etc will bring back the CPUs to some extent but the driver will be connectivity for the intermediate and long term. Unless they make a CPU that enables faster connectivity, I think the days when the microprocessor was the driving force of tech are over. >>>> Some of the proposed Internet technologies, in particular Microsoft's Chrome, trade-off bandwidth versus local processing power. Data is sent over the Internet highly compressed to be processed on your local machine. Fast CPU's are necessary. Content is the key here. If the Internet content is good enough and you need a PII 400+ to display it in full multimedia glory, then this could be an additional upgrade driver for home PC's. Dave