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

To: Jacob Snyder who wrote (6089)	6/29/1998 6:46:00 PM
From: Ramsey Su	Read Replies (1) \| Respond to of 10921

Jacob or anyone, I am surprised that there is no discussion about ROK's spinoff. Having never followed that stock, I am not sure what ROK's semi-conductor unit produces. Unlike TXN, they can't even find a buyer for the stuff that they don't want? Are they sticking a "dog" to their shareholders who don't have a choice? Is this another "customer" of the semi-eq companies going down the drain? Ramsey

To: Jacob Snyder who wrote (6089)	6/30/1998 7:30:00 AM
From: Mason Barge	Read Replies (4) \| Respond to of 10921

<<Didn't the Japanese say almost exactly the same thing a couple of years ago, and nothing came of it? At this point, their credibility is so low, that I don't think anyone should believe them until we see deadlines, numbers, specifics >> I think it's quite credible. As hidebound as the Japanese financial sector is, they aren't stupid and they do have, perhaps, the greatest economic growth story in history -- to put their achievement into perspective, imagine Canada or Mexico as the dominant economic force in the Western hemisphere. Also, they aren't the most forthcoming people in the world about their plans. Anyway, we'll see in the next few weeks. <<Selling those Securities over two or three years will cause no dislocations.>> OK, I admit I overstated the possibility of their dumping their US Treasures. But two points: First, there has also been enormous purchasing of US Treasuries by private Asian investors ($300BB in the past three months), and second, the Japanese govt. will have to hypothecate a great deal of its enormous foreign reserve, and sell off some amount. The buying and holding of these has had a sizeable positive impact on the US financial markets. Just cutting off the inflow will raise our artificially-low interest rates, and a reversal of flow will have a profound impact on a stock market with historically high valuations. Coke has a PE of 50 and a projected 18% growth rate (last year its EPS grew 1%). I think the chances of seeing a stock market tumble are extremely high and perhaps even inevitable. I just don't see an Asian recovery without a temporarily negative effect on the US stock and bond market. And as I think about it, the scenario is pretty well inevitable -- look at Korea. To the immediate point, a lot of Asian companies are going to be buying semiconductor equipment in the next year or so. This may be one of the best sectors of the US investment market -- to tell you the truth, I'd rather be holding AMAT than bonds or index funds right now.