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

To: Michael Sphar who wrote (6121)	7/1/1998 1:32:00 PM
From: Joseph Beltran	Read Replies (1) \| Respond to of 10921

Michael, The debt to equity ratio of most conglomerates in south korea is absolutely mind-boggling. No legitemate company in the u.s. could operate successfully with that sort of balance sheet. What should have occurred last year (and a good probability that it might still occur)is an outright default on the part of these countries. let the people/institutions that made those loans assume the full risk. Instead, we are being forced to use taxpayer $$$ through the imf to bail them out. I am ignoring, of course, the ramifications that an outright default would have on the world economy, but a good part of me is so pissed off at the mindless manner in which we go around giving away our taxpayers $$$ to save everyone else's ass.... regards

To: Michael Sphar who wrote (6121)	7/1/1998 1:58:00 PM
From: Mason Barge	Respond to of 10921

<<What am I missing? >> Here's an old story that explains it. Car salesman: Our prices are so low, we lose money on every one of these we sell. Customer: How do you stay in business? Salesman: Volume!

To: Michael Sphar who wrote (6121)	7/1/1998 3:04:00 PM
From: Kirk Winkler	Read Replies (3) \| Respond to of 10921

Those who don't learn from the mistakes of history are doomed to repeat them. If you look at the clearly pronounced historical cycles in this industry, (as an aside, I find it amazing that every six months, someone 'important' declares that this industry has matured and is no longer susceptible to these cycles), it is clear how the cycle develops: Generally speaking, there is a period of undercapacity, marked by high IC prices (most easily seen in the memory market) followed by a mad rush to build capacity to cash in. Computer makers in this time usually double, triple and quadruple memory orders in order to make up for the shortage, distorting ACTUAL demand, but pushing capacity build-up all over the world. Finally, all the capacity development catches up to the actual demand, the 'box-makers' cut off orders, IC prices plummet, chip makers put build-outs on hold, equipment makers announce crappy earnings and on to the next phase. This includes dismal outlooks, capacity that's good forever, delays in implementing new technologies, like ramping to the next wafer size, and general doomsday attitudes. However, as has always happened in the past, and I strongly believe it will happen in this cycle, the industry will start to see undercapacity well before expectations, there will be a distinct lag-time before the reeling and therefore conservative chip-makers will begin aggressively pursuing new output, and these fabs simply don't go up overnight. This will obviously drive the equipment makers back to volume production, rewarding those with new technologies and working systems for the next wafer size, and they will begin to kick out the phat margins that I so love about this industry! Of course, along the way, companies will come and go. It's simple economic law: when you make money, others see you make money, they enter the market to get some of that money along with everyone else, overcapacity is inevitable, the weaker ones fall off as the margins shrink and eventually equilibrium is found (theoretically). The whole mess with the different DRAM producers in Asia is the weeding out process. It took probably longer than it should because in many cases, the local governments were proping some of them up. I strongly believe this industry will rebound and in a big way. I think the US market will be particularly strong, primarily because US companies got out of memory (with a couple of exceptions) some time ago. Also take a close look at the Europeans. ST, Siemens and Philips have been doing a brisk, well-managed business for some time. ohh, that's long-winded! Sorry! I hope it's not just jibberish! Regards, Kirk